Administration indebtedness from families, companies and the State has reached a new maximum. Even so, the increase in GDP could accommodate these rises.
Economy’s indebtedness — from the public sector, companies and families, excluding banks — stands at a new record: 724.4 billion euros, according to the Bank of Portugal. Out of these three sectors, only families contributed to the deleveraging.
Since January 2017, nominal indebtedness has been increasing every month. In May, public sector indebtedness had a 700 million euros increase, while it had a one million euros increase in the private sector.
Considering that GDP is reported every quarter, there are still no data available to rigorously assess if the growth rhythm of the economic activity was enough to accommodate this nominal increase. By March, the weight of indebtedness in GDP was 385.1% — a much lower number than what was registered in the last quarter of 2016, as well as in the homologous period, when it went up to 392.6%.
Assuming the Finance Ministry’s 2017 GDP estimates, the amount registered in May represents a decrease in the weight of indebtedness to 379.5%.
The Bank of Portugal further states the increase in financing was made by means of operations within public administrations — external financing decreased.
In the private sector, numbers reflect an increase in companies’ indebtedness in other countries, compensated by a decrease in the resort to financing with the Portuguese banking. Families indebtedness decreased to 141.8 billion euros, 207 million euros less than what was registered in April.