Portugal has the second largest debt increase. Eurostat postpones decision on CGD’s impact on the deficit

  • ECO News
  • 24 October 2017

Portugal stands out from other EU countries, states Eurostat. The Portuguese public debt has the second largest increase of the Union. The Euro Area debt is falling.

Portugal registered the third largest debt of the Euro Area in the second quarter of the year. In a time when the region’s debt is decreasing, Portugal’s debt suffers an increase — the second largest, according to Eurostat.

In the opposite end of the spectrum stands Bulgaria, Luxembourg and Estonia, which have the smallest debt in percentage of GDP of the European Union. In the second quarter, the Portuguese public debt stood at 132.1% of GDP, the third highest debt of the EU, following Italy (134.7%) and Greece (175%). Portugal registered a 1.7 percentage points’ increase from the first to the second quarter of 2017, only surpassed by Lithuania, which increased 2.6 percentage points. For this time frame, Portugal has the fifth largest increase.

In the Euro Area, however, there is an inverse tendency: public debt for all member-States retrieved slightly from 89.2% in the first quarter to 89.1% in the second quarter. In an homologous comparison, the fall was more pronounced: from 90.8% to the current 89.1%. As for the EU, there was a decrease to 83.4%. In the previous quarter, debt from the 28 members stood at 83.6% and in the same period of last year, it stood at 83.8%.

Eurostat postponed decision on CGD’s impact on Portugal’s budgetary deficit

This Tuesday, Eurostat’s also published data on member-States deficits. Brussels’ statistical office disclosed the Portuguese deficit was of 1.6% of GDP in the second quarter of 2017; this percentage is seasonally adjusted, without considering the impact of the capital injection on the public bank Caixa Geral de Depósitos (CGD).

“The net borrowing (deficit) does not include any impact of the recapitalization of Caixa Geral de Depósitos (CGD)”, Eurostat explains. “Given the complexity of this operation, there is an ongoing exchange of information and dialogue between Statistics Portugal [INE] and the European Commission (Eurostat) regarding its recording in national accounts”.