Portugal €270Bn in the red
Portugal’s accumulated public debt reached a record €270Bn at the end of 2020.
The debt was made worse last year because the government was forced to launch massive financial support packages to help businesses and families during the pandemic.
The country’s debt increased by €20Bn last year, reaching a record amount of €270Bn according to Brussels and the Bank of Portugal.
“At the end of 2020, the public debt stood at €270.4Bn, increasing €20.4Bn in relation to the end of 2019,” the Bank of Portugal reveals.
The Portuguese central bank said that this sharp increase above all resulted in “an increase in debt securities of around €17.6Bn”.
This increase is also explained by an increase in government-backed loans (€1.7Bn) and deposit liabilities (€1.1Bn) mainly through the issue of treasury certificates”.
To prevent a shock to the economy, the government launched a number of measures to support businesses and families and borrowed on the international money lending markets to pay for credit and cashflow relief measures, layoffs and recovery packages all back by State guarantees.
Data from the Bank of Portugal also stresses the importance of a €9.4Bn cash cushion in terms of borrowing, with Portugal taking advantage of historically low interest rates. Public administration deposits increased €9.4Bn to €23.9Bn at the end of 2020.
Despite pumping money into the cash cushion, net public debt liabilities increased from €11Bn on 2019 to a total of €246.Bn.
With the economy falling, it is expected that the ratio of public debt against GDP will also have gone up. After falling back to €117.2% of GDP in 2019, the government ended 2020 with a public debt of 134.8% of GDP according to the forecast set out in the State Budget for 2021.
Portugal has one of the largest debts for a country of its size in the world. Over the last decade, public debt has skyrocketed by 50% according to the Bank of Portugal.
At the end of 2010, the debt was €180Bn. Ten years later it was €270Bn – an increase of €90Bn for the decade.