Public debt stands below the 250 billion euros’ threshold

  • ECO News
  • 2 November 2017

Public debt took a 1.2 billion euros' fall and now stands below the 250 billion euros' threshold. Net deposit debt also decreased in comparison to August.

Public debt took a 1,200 million euros’ plunge in September and returned to numbers below the 250 billion euros’ threshold. These numbers were disclosed this Thursday by the Bank of Portugal (BdP) and break a cycle of hikes that had been going on for three months.

According to the Portuguese central bank, public debt registered in September stood at 249,141 million euros. So far, there is no data on the third quarter Gross Domestic Product, so it is not possible to make a precise calculation of how much will this debt weight in on GDP – which is why BdP did not include this number in their report.

However, assuming the level of wealth production foreseen by the Finance Ministry for this year will be confirmed, September’s public debt represents 129.4% of GDP — which is still above the 126.2% goal inscribed in the 2018 State Budget Draft handed in Parliament on October 13.

As explained by the Bank of Portugal, the debt plunge registered in September “chiefly reflects net redemption of securities amounting to €1.4 billion”.

The public debt net of public administrations’ deposits also decreased 1,200 million euros in comparison to August, standing at 221.6 million euros. This number is far from the amounts reported until the beginning of October because BdP now highlights the debt net of deposits of all public administrations instead of highlighting solely the debt net of deposits of central administrations.

Considering the same amount of wealth produced to calculate the weight of this indebtedness, it is possible to ascertain that net debt represents 115.1% of GDP.