The Bank of Portugal has confirmed that its efforts to reduce Portugal’s public debt since 202 are back on track, even taking in to consideration the effects of the pandemic.
Portugal’s public debt fell by 7.7 percentage points of GDP, falling from 135.2% in 2020 to 127.5% in 2021, in line with forecasts. It was the biggest reduction in public debt (in percentage of GDP) ever, and the first time in democracy that the public debt has fallen in nominal terms, down €900 million on 2020.
This strong fall in public debt was possible because of the strong recovery of the Portuguese economy, improvements in public accounts and in the position of the overall State treasury, particularly in financing its debts at extremely low interest rates, and improved tax and social security revenues.
The ministry of finances has called the result “excellent news for Portugal”.
“Getting Portugal’s public debt reduction back on track is vital for the international credibility of the country and confidence in the Portuguese economy. Within the current context of a return to normal in terms of momentary policy at a European level, it fosters greater security and stability, and financing for the state, its companies and families under better conditions. These are all important factors for the economic recovery of Portugal and investment attraction. “
Source Essential Business