Banco de Portugal reports decline in external debt to 33.9% of GDP

Data from the Banco de Portugal indicates that Portugal's external debt decreased from 36.5% of GDP to 33.9% during the first half of the year. However, the external surplus of the balance of payments fell by one billion euros to approximately 1.2 billion euros. This reduction was driven by a 2.5 billion euro deficit in the goods balance, as imports grew by 4.71 billion euros while exports increased by only 2.2 billion euros.

The capital balance saw an increase of 1.32 billion euros, supported by insurance reinsurance receipts from storms and European funds, such as the Recovery and Resilience Plan (PRR). The external surplus represented 0.8% of the semiannual GDP.

Regarding debt securities, issuances by resident entities rose 4.3% year-on-year to approximately 333.7 billion euros by the end of July. While the financial sector and non-financial companies saw issuances exceed amortizations, public administrations saw a significant decrease, with net issuances minus amortizations being negative by 8.76 billion euros. This decline in public administration debt reflects the context of rising interest rates.