Public debt back up again, now close to €250bn

  • ECO News
  • 1 October 2018

Public debt has increased by a billion euros between July and August, mostly a result of debt securities issuance costs. The value is now near the record high of €250bn.

Public debt has increased by one billion euros between the months of July and August. This phenomenon was the result of the debt securities issuance, making the public debt amount reach a considerable high, standing now almost at €250bn. The information was released this Monday morning by the Portuguese central bank, the Bank of Portugal (BdP).

According to the banking regulator headed by Carlos Costa, Portuguese public debt in August stood at €249.3bn, an increase of one billion euros in comparison to July, with public indebtedness approaching the record high of May in which it got to €250.520bn. The public debt is calculated within Maastricht’s convergence framework, which establishes that government debt as a % of GDP should not go above the 60% threshold.

The BdP explained that the significant increase can be justified mostly with debt issuance. On August 15th, Portugal sold a billion euros in short-term debt (treasury bills) to investors, the equivalent to the increase witnessed in the debt amount that month.

Nevertheless, net public debt overall dropped. “Assets from public administration deposits increased by €3.8 bn, in comparison to the previous month, accounting for a decrease in €-2.8 bn in comparison to the previous month, reaching a total amount of €224.9 bn”, the BdP announced.