Public debt rises 5% since the beginning of the year to a record of 284.5 billion
State indebtedness rose by 3.18% in May compared to the same month in 2024, marking the fourth consecutive month of year-on-year increases above 3%.
Public debt rose by 3.7 billion in May, to a new record of 284.5 billion euros. Since the beginning of the year, debt at the Maastricht level has grown by 5.1%.
“This change reflected the increase in debt bonds (+3.5 billion euros), especially long-term debt, and savings certificates (+0.5 billion euros), which was partially offset by the decrease in Treasury certificates (-0.2 billion euros) and loans (-0.1 billion euros)”, says the Bank of Portugal in statistical information released this Tuesday.
The figures show a year-on-year increase of 3.18% in public debt in May. It was the fourth consecutive month with an evolution above 3%, which hasn’t happened since July 2021.
The absolute value of public debt has been rising since December. Looking only at the first five months of the year, debt increased by 5.13%, or 13.89 billion euros.
The amount of public administration deposits also grew in May. “Assets in general government deposits totalled 24.3 billion euros, which corresponds to an increase of 3.8 billion euros compared to April. Deducted from these deposits, public debt fell by 0.1 billion euros to 260.3 billion euros”, points out the Bank of Portugal’s statistical note.
State debt tends to increase more in the first half of the year, a period in which IGCP, the agency responsible for public credit, concentrates most of its emissions. On Monday, the IGCP reported that it had executed almost half (46.6%) of the annual issuance target in the annual financing plan by the end of May. Considering only Treasury Bonds, and including the June auction, execution remains more advanced with 67% of the annual target of 20.5 billion euros having been issued.
General government debt as a percentage of GDP stood at 96.4% at the end of the first quarter, according to data from the Bank of Portugal.
Debt will be pressured in the coming months by the increase in defence investment agreed within NATO. Former finance minister João Leão said in a recent interview with Jornal de Negócios that “Portugal will no longer be able to reduce public debt”.
