Portugal reduces indebtedness, no longer in worst three

  • Lusa
  • 2 December 2022

The performance in 2022 has allowed Portugal to be removed from the "isolated position" of the third most indebted country in Europe, said the country's finance minister.

Portugal’s finance minister said on Wednesday that the government’s performance in 2022 has allowed Portugal to be removed from the “isolated position” of the third most indebted country in Europe, stressing that this represents a “credibility gain”.

“The effort we made during 2022 will allow us to ensure that Portugal is no longer in this position of third on the podium of the most indebted countries and that Portugal is part of a platoon where Spain, France and Belgium are, in that order,” said Fernando Medina on Wednesday night.

The minister was speaking at a dinner, in Funchal, as part of the “500 biggest companies in Madeira” event organised by the Diário de Notícias of Madeira.

“This year we will have the biggest reduction in the weight of public debt in the product since there is any kind of record,” said Fernando Medina, adding: “We will always hear the critics devaluing this fact, saying that it was the economy, that it was inflation. It is true. All this helps. But the truth is also this: if we had decided to spend all the money, the debt would have remained as it is.”

The socialist leader considered that the reduction of public debt is one of the aspects that benefit the country in the current international situation, also highlighting the geographical location as a factor of attractiveness and development, as well as the high employment rate and political and social stability.

“Portugal had, at the beginning of 2022, a public debt of 125% of GDP”, said Medina, adding that only Greece and Italy had higher debts.

“The fundamental issue is that we will no longer be in an isolated position. We will be perfectly integrated within the averages of countries with economies much larger than Portugal’s,” he added.

The finance minister also said that the socialist government’s priorities for 2023 were based on support for family income and job protection, increased investment and balanced public finances.

“Our goal for 2023 is to have a primary balance of 1.6% of output. That is, Portugal will now have a surplus in its budget accounts if we exclude the amount of interest we have to pay,” he said, explaining that this would reduce public debt to 110% of output.

“Our goal is to reach 2026 with a debt below 100% of output,” he said.