Portugal’s public debt soared by 20 billion in 2020

Portuguese public debt soared in 2020 with the government having to launch massive economic support because of the pandemic. Portugal’s debt increased by 20 billion euros last year, reaching a record 270.4 billion euros, from the Maastricht perspective, on December 31.

“At the end of 2020, public debt stood at 270.4 billion euros, a 20.4 billion euros increase from 2019,” the Bank of Portugal reveals this Monday.

The central bank explains that this significant growth was mainly the result of a “rise in debt securities” of around 17.6 billion euros. This rise is also explained by the increase in “liabilities in loans (1.7 billion euros) and deposit liabilities (1.1 billion euros), mainly in Treasury certificates.”

To halt the pandemic impact, the government launched a series of measures to support businesses and households and relied on market financing to implement relief measures such as lay-offs, recovery support, or publicly guaranteed credit lines.

At last, “General government deposits stood at 23.9 billion euros, a 9.4 billion euros increase from 2019, with public debt net of deposits increasing by 11.0 billion euros from the previous year, to a total of 246.5 billion euros.”

Data from the Bank of Portugal also show an important strengthening of the ‘financial cushion’ in a period of global uncertainty and with the country taking advantage of market conditions and financing costs at historical lows. General government deposits increased by 9.4 billion euros to 23.9 billion euros at the end of 2020.

Despite the reinforcement of the ‘financial cushion’, public debt net of deposits rose (by 11 billion euros compared to the previous year) to a total of 246.5 billion euros.