Portugal’s public debt in June the highest ever

11 August 2016

Portugal’s public debt stood at 240.1 billion euros or 131.6 percent of gross domestic product at the end of June, the highest indebtedness ever, the Technical Budget Support Unit (UTAO) announced.

The UTAO provides technical support to parliament. In its monthly statement on public debt it reported that indebtedness recorded at the end of June was higher than the end-of-year figure forecast by all national and international organisations.

The forecasts by the International Monetary Fund, Organisation for Economic Cooperation and Development, European Commission and the Finance Ministry for public debt at the end of 2016 range from 124.8 percent of GDP (Portuguese government) to 128.3 percent of GDP (IMF and OECD).

The UTAO indicated that the amount of debt registered in the first half-year may eventually diminish in the second half-year. But that possibility may be compromised by recapitalization of the public bank Caixa Geral de Depósitos and the result of the sale of Novo Banco, which should fall short of the 4.9 billion euros respectively applied.

The UTAO also called attention to the upward revision of the budget deficit target for 2016, which is now 2.5 percent of GDP, and to the failed predictions for economic growth and inflation, which will impact the ratio used to calculate debt from the Maastricht Treaty standpoint. (Macauhub/PT)