Portuguese public debt increases slightly, to close to the 250 billion threshold

According to the Bank of Portugal, the Portuguese public administrations’ debt according to Maastricht, the reference definition for the European rules, reached the 249.2 billion euros in July — a 100 million euros’ increase in comparison to the previous month. Although it was partly balanced out by the final 1.8 billion euros’ reimbursement to the International Monetary Fund, this increase can be justified with the agreement between the Portuguese State and Santander Totta on the transports’ swaps.

The Bank of Portugal explains, therefore, that this small variation in comparison to the previous month is a result of the opposing impact of different effects:

• On the one hand, there was a 0.6 billion euros’ increase in the issuance of Treasury Certificates, and “negative net issues of securities to the same amount”. In addition, in July, loans granted by resident banks also influenced this increase in the Portuguese debt, with special highlight to the agreement signed between the State and Banco Santander Totta “regarding derivative contracts with state-owned enterprises in the transport sector (€2.3 billion)”, says the Bank of Portugal.
• On the opposite direction, debt was helped by the 1.8 billion euros’ reimbursement made by IGCP, the agency managing Portugal’s debt, to the International Monetary Fund (IMF).

Net deposit debt increased by 908 million euros to 230.3 billion euros. In July, the State’s financial cushion had 827 million euros less in than in June, a decrease which can be linked to the reimbursement made to IMF.

Therefore, with this month’s small increase, debt continues to stand close to the 250 billion euros’ threshold. The importance of this number to GDP, however, may not be so bad: this Thursday, INE made an upward revision of the second quarter GDP to 2.9%, mainly justified by more Investment.

The Stability and Growth Plan aims to have a 127.9% debt to GDP in the end of 2017, below the 130.4% from last year.