Portugal’s combined public and private debt hits new historic high

Never in recorded history has Portugal’s total non-financial sector debt reached such dizzying heights as it did by June this year — €762.4Bn.

This is according to data from the Bank of Portugal which calculates that the combined public and private accumulated debt is €14Bn more (+1.9%) than at the end of 2020.
The figures are not surprising given the economic effect of the pandemic which saw swathes of the economy shut down or severely constrained and companies and individuals applying for government-backed stays on their mortgages and personal and company loan repayments.
The figures overtook the previous record seen in May of €757.5Bn.
The increase was largely down to an increase in public sector debt (+2.4% to a total of €350.5Bn) and €6Bn in private sector debt (an increase of 1.5%, to €412Bn).
The Bank of Portugal states that the increase in public sector debt was above all down to increases in debt owed to the financial sector (€4.4Bn) and overseas debt (€3Bn).
Regarding the non-financial private sector debt, company debt increased €4Bn “an increase mostly explained by the loans obtained from the financial sector (€2.2Bn) and from international lenders (€1.8Bn). Private ‘household’ debt increased €2Bn “reflecting the increase in loans from the financial sector”.