External deficit hits the worst record since 2011

The external deficit reached 2.614M€ in May, which sets both the current and capital balances in their worst record since 2011. Data was revealed by the Bank of Portugal this Wednesday. Until May 2018, both the current and capital balances have presented a negative balance of 1.303M€, despite that year’s overall balance ended up being positive.

One must go back to the first five months of 2011 to find the worst balance performance. At the time, the external deficit reached 5.492M€.

According to the Bank of Portugal, “the balance of goods contributed to this evolution. In nominal terms, the balance of goods’ deficit increased 1.901M€ as the balance of services’ surplus decreased 25M€.

“In the first five months of the year, the exportation of goods (+4.4%) and services (+5.7%) increased by 4.8% as the importations of goods (10.2%) and services (11.2%) increased by 10.3%”, the Bank of Portugal adds.

In June, the institution led by Governor Carlos Costa warned to the risk of the commercial deficit this year, not impacting on the external balance’s surplus and the country’s financing capacity. This evolution is due to yields’ reduction on public debts and the increasing EU transferences to Portugal.