Portugal’s economic indebtedness increases 1.5 billion euros

  • ECO News
  • 19 March 2020

The indebtedness of the economy increased by 1.5 billion euros in January, according to data released by the Bank of Portugal.

The non-financial sector indebtedness in Portugal (companies, households and the State) increased by 1.5 billion euros between December 2019 and January, rising from 721 billion euros to 722.5 billion euros, according to data released this Thursday by the Bank of Portugal.

The figures show that this increase is because of the increase in public sector debt, which may be explained by the concentration of public debt issues. In January, the IGCP made a syndicated issue, as usual at the beginning of each year, in which it issued four billion euros.

“This increase was due to the 2.0 billion euro increase in public sector debt, which was partially offset by the decrease in private sector debt,” confirms the central bank in the statistical information note.

Non-financial public sector debt increased from 317.4 billion euros in December 2019 to 319.4 billion euros in January 2020, plus two billion euros. Corporate indebtedness fell slightly (by around 500 million euros) and household indebtedness remained virtually unchanged.

However, the most relevant indicator to measure the indebtedness of a country (State, public and private companies and households) is its weight in GDP as it puts it in perspective with the production of the economy. From this perspective, the value has been decreasing since the peak reached in 2013. 2019 closed with a weight of 339.7%, less 11.7 percentage points compared to the end of 2018 (351.4%).

These data refer to the non-financial sector, i.e., they exclude banks and other financial institutions. The figure is not consolidated, i.e. it does not discount the indebtedness among the various agents.