Interest on public debt up €1Bn in 2024

 In News, Public debt, State Budget

The Portuguese State will have to fork out €1Bn more to pay interest to service its national debt, in particular because of its spend on the civil service.

But part of the reason is the European Central Bank’s (ECB) tight monetary policy to control inflation through higher interest rates having a bearing on Portugal’s public borrowing.
This is according to a Policies Framework document for 2024 in which the Ministry of Finances projects the State Budget for the following year — in this case 2024 – on both expenditure and income.
The ministry estimates that expenditure with interest on public administration will increase just over €1Bn next year.
It is the first time spending on debt servicing has gone up in many years after years of low interest rates enabled Portugal to make savings on debt. In 2022, Portugal paid around €5Bn in interest on debt servicing.
This year the situation changed because of galloping interest rates, which this year will put the cost of public borrowing at €5.89Bn according to the Stability Programme 2023-2027. Next year the State is on track to fork out almost €€7Bn on interest. (+17%)