The projection released this Wednesday by the National Statistics Institute (INE) is below the estimate that the government included in the Supplementary Budget: 134.4% of GDP.
The Portuguese debt deepening in a pandemic year may be slightly lower than expected. Estimates published this Wednesday by the National Statistics Institute (INE), based on information provided by the Finance Ministry, point to a gross debt at 133.8% of GDP, i.e. 0.6 percentage points less than the figure included by the government in the Supplementary Budget.
The government’s projection points to 134.4%, but could be revised downwards since the report sent by INE to Eurostat in the context of the second notification for 2020 on the Excessive Deficit Procedure (EDP) points to another figure: 138.8%.
“For the current year (2020), the estimates of net lending / net borrowing, gross debt and GDP are a responsibility of the Ministry of Finance, based on the macroeconomic and budgetary scenario, underlying the Supplementary 2020 State Budget, approved by the Assembly of the Republic,” explains the report.
The difference in the ratio with the June figure seems to be on the GDP side and not on the public debt. According to the Public Finance Council (PFC) report on the Supplementary Budget, the government counted gross debt of 268,302 million euros at the end of this year and nominal GDP of 199,630 million euros, resulting in a ratio of 134.4% of GDP. Now, in the figures sent by INE to Eurostat, what changes is the value of nominal GDP, which rises to 200.553 million euros, leading to a fall in the public debt ratio to 133.8% of GDP. This could be a downward revision of GDP contraction in 2020 or an upward revision of inflation.
In any case, even if it is lower, the debt burden on the national economy compares to 117.2% in 2019, so it will still end up being the highest ever.