The debt of the economy increased by 8.6 billion euros until June, compared to 2018, to 730 billion euros, but the debt burden in GDP fell to 2010 lows, the Bank of Portugal reported today.
Compared to the end of 2018, non-financial sector indebtedness [que abrange Estado, empresas públicas e privadas e famílias] increased 8.6 billion euros ”in the first six months of the year, the Bank of Portugal (BdP) reported today.
The central bank explains that this evolution resulted from the increase of 7.19 billion euros in public sector debt and 1.46 billion euros in private sector debt.
In total, “at the end of the first half of 2019, the indebtedness of the non-financial sector stood at 730.0 billion euros”, of which 328.9 billion euros related to the public sector and 401.1 billion euros. to the private sector, according to the BdP statistical information note.
Data show that as a percentage of Gross Domestic Product (GDP), non-financial sector debt declined from 357.6% at the end of the second quarter to 355.2% at the end of June, which is the lowest ratio since the first quarter of 2010, when the debt burden on GDP amounted to 350.9%.
It was in the second quarter of 2013 that the non-financial sector debt-to-GDP ratio peaked at 430% and has since declined.
With regard to the increase in public sector indebtedness up to June (plus 7.2 billion euros), Banco de Portugal indicates that “it resulted mainly from the increase in indebtedness to general government and the non-resident sector, which was partially offset by the reduction in indebtedness vis-à-vis the financial sector ”.
In the private sector, the increase in indebtedness (1.5 billion euros) in the first six months of the year was mainly due to the 1.4 billion euros increase in corporate indebtedness, which reflected the increase in financing vis-à-vis the financial and foreign sector.