The government debt ratio will fall to 98.7% in 2023, the lowest since 2009.

The public debt ratio fell below 100% of GDP in 2023, reaching 98.7%, the lowest value since 2009, according to data published this Thursday by the Bank of Portugal (BdP).

The share of public debt in gross domestic product (GDP) fell by 13.7 percentage points (pp) from 112.4% recorded in 2022, remaining below the 103% officially projected by the government and reaching a figure predicted a year earlier for 2024 (98.9%).

This is also the lowest rate since 2009, when it was 87.8%.

Mario Centeno

Bank of Portugal Governor Mario Centeno said this Thursday that public debt was below 100% of gross domestic product (GDP) at the end of 2023, awaiting official data to be published this morning.

In his opening speech at the Banking Forum organized by the Jornal Económico in Lisbon, Centeno said that “one of the main pillars of the success of the Portuguese economy is financial stability” and that, to demonstrate this, he likes to start by reducing debt, and private.

Regarding the national debt, Centeno said: “Today we learn that it is below 100%. [do PIB]”, which “hasn’t happened for many years.”

Economists

Economists consulted by Lusa already believed that debt was expected to be around 100% of GDP due to the combined positive effect of the economy’s above-normal nominal growth due to inflation, as well as the economy’s good real performance in 2023.

The National Institute of Statistics (INE) reported this week that the Portuguese economy grew 2.3% for the full year, registering annual growth of 2.2% and quarterly growth of 0.8% in the fourth quarter.

In nominal terms, public debt, from a Maastricht perspective, fell by €9.4 billion in 2023 compared to 2022, to €263 billion.

According to banking supervisors, this change is largely due to the reduction in short-term and long-term debt securities (-4.2 billion euros and -11.0 billion euros, respectively), treasury (-4.2 billion euros) and loans. (-3.1 billion euros).

In contrast, positive net issuances of savings certificates stood out (€14.4 billion).

General government deposit assets fell by €2.5 billion in 2023.

Public debt, subtracted from assets on deposit, fell by 6.8 billion to 251.7 billion euros.

In the last month of the year, public debt, from a Maastricht perspective, fell by €4.8 billion compared to the previous month due to a reduction in debt securities (-€3.3 billion compared to November), mainly long-term deposits. liabilities (-1.0 billion euros) and loans (-0.6 billion euros).