After the record in April, public debt decreases in May

Public debt was 247.3 billion euros in May. In comparison to April, public debt decreased 200 million euros, after having reached a new record. According to the Bank of Portugal, “this change reflects a fall in loans by €0.7 billion, which was partially offset by net issues of securities of €0.5 billion”. Public debt went from 247,515 in April to 247,274 million euros in May, the first month of 2017 in which gross public debt plummeted.

This means that during the month of May, Portugal made more debt amortizations (700 million euros) than new issuances (500 million euros), which allowed for a fall in the overall balance of the Portuguese gross public debt. Part of the amortizations were made by resorting to the financial cushion worth 600 million euros, which is why, in spite of the gross indebtedness fall, net balance increased to 228.1 billion euros — a new record. The financial cushion stood at 19.2 billion euros.

On May 17, IGCP (Portuguese Debt Management Agency) placed 1.5 billion euros in two Treasury bills’ auctions, on six and 12 months maturities, which had lower negative interests. This debt issuance happened during a relief period of the Portuguese debt yields in the national secondary market.

In March, the debt ratio reached 130.5% of GDP. In April, the Portuguese economy’s indebtedness had reached a new maximum of 723.6 billion euros — it increased for the fourth consecutive month.