Portugal posts euro zone’s fourth biggest debt drop

Portugal cut its public debt ratio by 3.4 percentage points year on year to 92.5% of GDP in the second quarter of 2026, the fourth biggest decline in the euro zone, according to Eurostat data. The figures show Portugal improving its debt burden while still remaining among the currency bloc’s most indebted countries.

The ratio fell from 95.9% a year earlier, behind only Greece, Cyprus and Slovenia in terms of annual improvement among euro area members. Even so, Portugal still had the sixth highest public debt ratio in the 21-country euro zone.

Eurostat said the euro area’s overall debt ratio rose to 88.8% of GDP at the end of the second quarter, from 87.3% a year earlier.

Quarter-on-quarter, however, Portugal moved in the opposite direction. Between the first and second quarters, its debt ratio rose from 90.4% to 92.5% of GDP, the largest increase in the euro zone, ahead of Latvia and Lithuania. The second-quarter rise was driven mainly by long-term debt securities and savings certificates, according to Banco de Portugal.

Portugal’s budget balance was stronger than its debt ranking suggests. Eurostat said Portugal posted a seasonally adjusted surplus of 0.8% of GDP in the second quarter, up from 0.7% in the previous quarter, making it one of only four euro area countries with a surplus. Among the six most indebted euro zone countries, only Greece and Portugal recorded a positive fiscal balance.

Originally published at Eco.pt