The Portuguese government debt ended the year 2014 at 128.7% of GDP, a value that is above the forecasts made by the Government last October, revealed on Monday the Bank of Portugal.
According to the data published in the Statistical Bulletin of February, the debt value (using the optical Maastricht) amounted to 224,477 million euros at the end of last December. As a percentage of GDP, this represents 128.7%. It is a decline compared to 131.4% at the end of the third quarter 2014, but it means an increase compared to the end of 2013.
This year, there will be thus the first, since the beginning of crisis in Portugal that can reverse the worsening trend of the weight of public debt in the economy. This was a goal set by the Government which, when presented in October the draft state budget for 2015 had estimated that at the end of 2014, public debt amounts to 127.2% of GDP.
Already during this month of February, the European Commission had advanced with an estimate for the value of public debt of 128.9% of GDP in 2014.
One explanation that has been given by the Executive to the maintenance of public debt in large amounts is that the Treasury, for precautionary reasons, have been accumulating significant cash surpluses. According to data from the Bank of Portugal, deposits accumulated in the end of 2014 were 14,929 million euros. Apart from these figures, the net public debt was 206 970 million in December 2014, compared with 201,245 million in December 2013. As a percentage of GDP, also recorded an increase in this indicator, which went 117.5% at the end of 2013 to 118.6% at the end of 2014.
The rise in the value of public debt to GDP is not the case on behalf of the State corporate sector debt. According to data from the Bank of Portugal, the debt of public enterprises increased from 27.7% of GDP at the end of 2013 to 25.6% at the end of 2014. When looking for public companies that are accounted for within the Administration public, the figures are 22.8% and 21.8%, respectively.
For 2015, the government is aiming for a reduction of the total public debt to 123.7% of GDP. The European Commission predicts a slightly higher number:. 124.5%
Private sector reduces debt
The continued rise in public sector debt has not resulted in 2014, the worsening of the debt of the total non-financial sector Portuguese, since, in the private sector, the trend was a clear decrease in the total amount of the stock of loans.
The statistical bulletin of the Bank of Portugal shows that both companies and individuals, continue to reduce their debt levels, asking fewer new loans than those who will amortizing. This is, in a scenario in which they are pressed by an economy with very moderate growth prospects and a banking sector that is now much more careful in granting credit.
In private companies, 2014 was clearly the year in which the weight of its debt to GDP fell more. Increased from 155.8% of GDP at the end of 2013 to 142% at the end of 2014. This indicator thus returned to the lowest value since the beginning of the international financial crisis. Portuguese companies, both SMEs and large ones, have been adopting a policy of rebalancing their balance sheets. No great outlook for domestic sales and the less receptive banks to lend money, choose not to bet on investment and making debt relief a priority.
From the perspective of individuals, the scenario is similar, especially with regard to debts to buy home. The total indebtedness of households fell from 91.3% of GDP at the end of 2013 to 85.7% in late 2014.
Loans for house purchase rose from the equivalent of 66.8 % of GDP to 63.1%, while loans for consumption rose from 24.4% to 22.6%
Overall, during the year 2014, the private sector non-financial Portuguese -. that still remains one of the most indebted in Europe – cut by about 20 percentage points of GDP their debt.
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