Portugal’s public debt falls €1Bn

Portugal’s public debt, from the point of view of the Maastricht criteria, and therefore Brussels, fell by €1.068 in November to €267Bn according to data from the Bank of Portugal.

Portugal’s public debt fell back in November after the record reached in October at €268Bn.
In October 2020, the public debt had risen by €1.1Bn to €268Bn, exceeding the previous record reached in August (€267Bn).
Despite this fall in November, the trajectory of Portugal’s debt is rising overall, particularly since and because of the pandemic, making the possibility of continued budget surpluses seen before March 2020 impossible.
“By and large the fall reflects repayments on medium and long term securities to the tune of €1.2Bn,” states the bank.
The central bank data also reveals that assets in public administration deposits fell by €2Bn to €22.4Bn. Therefore the net public deposits debt increased €0.9Bn in relation to the previous month, totalling €244Bn.
In percentage of GDP, the public debt reached 130.8% in the third quarter, increasing on the 126% of GDP attained in the second quarter. This development is explained by an increase in the budget deficit (4.9% of GDP by September), but mainly because of an abrupt fall in GDP because of the pandemic. The recovery seen in the third quarter supported the €1Bn reduction, but did not avoid the overall upward trajectory.
The Government’s expectation, according to the proposed State Budget for 2021, was to have a public debt of 134.8% of GDP in 2020, a more optimistic forecast than the 137.6% of GDP foreseen by the Council of Public Finances or the 137.2% by the International Monetary Fund (IMF).
By November 2020, Portugal’s total accumulated debt, meaning family, companies and the State hit a record high of €739.9Bn.
Since March, when the pandemic began to affect the country, Portuguese total economic debt has worsened by €19.4Bn, while the ratio of indebtedness in the non-financial sector increased to 361.6% of GDP.