Portugal posted €513M external surplus in January

  • Lusa
  • 22 March 2023

The Bank of Portugal said that "travel and tourism exports totalled €1.3 billion, the highest value on record for the month of January".

The Portuguese economy posted an external surplus of €513 million in January, the largest surplus since the beginning of the records, the Bank of Portugal said on Wednesday.

Last January, the current and capital account balance was  the highest since 1996 (start of the records). In January 2022, the Portuguese economy had an external deficit of €500 million.

In January 2023, the deficit of the balance of goods and services decreased by €561 million compared to the same month of 2022 as a result of the increase in the surplus of the balance of services and reduction in the deficit of the balance of goods.

The goods deficit decreased by €50 million to €1.6 billion, aided by the growth of exports, of €854 million, higher than the imports, of €804 million  (up 15.6% and 11.3%, respectively), according to the Bank of Portugal.

Exports of services rose 36%, and imports of services rose 25%, mainly due to travel and tourism and transport services.

Exports of travel and tourism grew by 69.7%, and imports of travel and services by 49.7%. This meant that the travel and tourism item had a surplus of €425 million.

The Bank of Portugal said that “travel and tourism exports totalled €1.3 billion, the highest value on record for the month of January”.

As for the primary income account, it continued with a deficit but fell €23 million due to an increase in the receipt of dividends from abroad.

The secondary income account maintained the surplus, which grew by €83 million, explained by the reduction in the financial contribution to the European Union and the increase in social benefits received.

As for the capital account, it showed a surplus of €227 million, which compares with a deficit of €120 million in January 2022, which “mainly reflects the reduction in payment of carbon emission licences”, the BdP said.

In the financial account, the balance was €500 million in January due to the increase in foreign assets (€3.9 billion) higher than the increase in liabilities (€3.4 billion).

The increase in assets comes mainly from general government investments in securitised debt issued by non-residents (€3 billion) and the increase in deposits abroad by the central bank (€1 billion).

As for liabilities, the increase is mainly due to investments by the rest of the world in Portuguese public debt securities (€1.4 billion) and to increases in central bank liabilities in the form of loans (€1.2 billion).

Portugal’s net assets over the rest of the world were positive, which was due to the general government sector (€1.5 billion) and other monetary financial institutions (€1.1 billion). The central bank and the non-financial corporations recorded growth in liabilities greater than the increase in assets (-€1.6 billion and -€800 billion, respectively).