Out of all Euro Area countries, the Portuguese sovereign debt is the one which presents shorter term issuances. It also stands out for being mostly held by companies and families.
A large portion is held by families and companies, and short-term financing weights the most. These are the two characteristics that put the Portuguese public debt on the spotlight in comparison to its European partners’ debt, according to Eurostat’s data.
The Portuguese public debt does not only stand out from the remaining European sovereign debts for being too high in comparison to national GDP (which was 130.4% of GDP in 2016, the third highest percentage in the EU). In Portugal, sovereign financing also stands out for being among one of the most dependent on short-term financing: maturities below one year weigh in a total of 16.7%, the highest in the Euro Area. The advantage of short-term financing are smaller interest; however it also represents a risk, because it is more vulnerable to sudden changes in the market.
In addition, the Portuguese debt also stands out from its peers because of the size of the portion belonging to resident companies and families: 11%. Adding debt placed in resident banks, Portugal no longer stands out among countries where resorting to domestic savings is the most representative way for public administrations to self-finance. In total, residents hold 41.8% of the Portuguese public debt. The remaining percentage is placed abroad.