Mário Centeno announced this Monday that Portugal pays today the entirety of the debt owed to the IMF. With the last reimbursement of €4.7bn, Portugal is saving €100m in interest rates.
Less than two weeks after António Costa announced at the Parliament that Portugal would pay the remaining of its debt to the IMF, the Finance Minister came to confirm that the transaction of the €4.7bn would be done this Monday, resulting in the saving of €100m in interest rates.
“Today we conclude the payment of the debt outstanding with the IMF, which stands at approximately €4.7bn. The total value of the loan surpassed €28bn, and the savings [on interest rates] we estimate to obtain with the early payment reach around €100m”, the minister announced.
He explained afterwards that the reimbursement “is important because the interest rates associated with the IMF loan were still too high”. On the other hand “early payments are financed by bonds with longer maturity”, which means that there will be a redemptions calendar in the next few years, especially for the year 2021 and 2022, when reimbursements to investors will peak.
Debt to GDP ratio will increase to 121.2% by the end of this year, according to the calculations on the State Budget 2019, and the tendency is that it will lower in the next few years, reaching, according to the Public Finances Council, 106.1% of GDP in 2022.