UTAO coordinator Rui Baleiras today defended what he wrote in a report that found the reduction in public debt in 2023 was “artificial” because it came from increased bond purchases by public entities.
“An important part of the decline in the public debt stock in 2023 is due to a significant increase in bond purchases,” said UTAO coordinator on the budget, finance and public administration committee, noting that “net purchases explain 86% of the gap.”
The coordinator clarified the statement that there was “artificiality” in the debt reduction for which he took responsibility, pointing out that a government entity can buy bonds and then sell them on the secondary market, but the taxpayers’ obligations remain the same.
“I stand by what is written in the report, but given the reactions that have occurred over the last two months regarding DLEO, if I could go back I would write the explanation that I have given here,” said Rui Baleiras, noting that it was not all the artificial origins, but the part that concerns the acquisition of titles.
“As long as taxpayers are held responsible for debts issued by the republic,” there is artificiality, he noted.
Rui Baleiras also added that the report arose out of “curiosity” after he received “indications at the end of 2023 that unusual transactions may have occurred that tend to anticipate the decline in public debt.”
In its report on market conditions, public debt and external debt until March, published on April 10, the UTAO believes that the significant increase in public debt consolidation ratios in 2023 is the result of budget surpluses and a “conscious search for investments in securities,” indicating that such an increase in investments by organic units in debt instruments will in some cases be the result of “simple management options,” and there are also cases where “financial management options were conditioned by government guidelines.”
A document from an organization led by Rui Baleiras classifies the reduction in public debt as “artificial.”
The public debt ratio in 2023 amounted to 99.1% of gross domestic product (GDP), and in nominal terms decreased by €9.3 billion compared to the previous year, to €263.1 billion.