Portuguese financial sector and debt trends

The Banco de Portugal has released reports detailing various aspects of the nation’s financial landscape, including sector debt, banking infrastructure, and external debt levels.

In July, the central bank reported that total non-financial sector debt reached €883.2 billion, driven by public borrowing, household mortgages, and corporate financing. During this period, the bank also noted a contraction in the physical banking network, with 477 branch closures over four years and a 15% reduction in cash-point coverage. To improve transparency, the bank is developing an online comparator for savings products.

By August, data indicated that Portugal’s external debt decreased to 33.9% of GDP, down from 36.5%. While the external surplus of the balance of payments fell to approximately €1.2 billion due to a deficit in the goods balance, the capital balance increased, supported by European funds and insurance reinsurance receipts. Additionally, while resident entities saw a 4.3% rise in debt security issuances, public administration debt saw a significant decrease, with net issuances minus amortizations falling by €8.76 billion.