Interest rate on Portuguese debt stock fell to 2.5% in 2019

  • ECO News
  • 23 April 2020

With the cost of new issuances falling close to 1%, the average interest rate on the total debt fell by 0.3 percentage points compared to 2018.

Portugal has never financed itself at such low costs as last year and it is now known that the total debt (new and existing) also had a lower average interest rate. The average interest rate on the Portuguese public debt stock stood at 2.5% in 2019, according to the latest data from the Treasury and Public Debt Management Agency – IGCP.

The data released by the agency led by Cristina Casalinho corresponds to a new minimum since at least 2010, when the registrations started. The figure compares with the average interest rate of 2.8% recorded in 2018 and with the maximum of 4.1% requested by investors in 2011, at the height of the financial crisis and in the year in which Portugal requested a bailout.

Since then, the average cost of public debt has been falling, in particular with the drop in interest on new debt and the strategy of strengthening issuances to repay more expensive securities in advance.

The cost of the new debt was fixed at 1.1% last year, thanks to the favourable external conditions of the financial markets – in particular the monetary stimuli of the European Central Bank (ECB) – as well as the investors’ and rating agencies’ confidence in Portugal’s financial capacity.