Total government debt and money owed by companies and families in Portugal exceeded €724 billion at the end of May, a new record in the history of the Republic.
"In May 2018, non-financial sector debt stood at €724.7 billion, of which €322.4 billion was for the public sector and €402.3 billion for the private sector," read the Bank of Portugal’s report, released on Thursday.
"As of April 2018, non-financial sector debt increased by €1 billion, as a result of the €300 million increase in public sector indebtedness and €700 million in private sector debt," the report stated.
The amount owed by the non-financial sector represents almost five times the value of the gross wealth produced by the Portuguese in a year.
The latest data provided by the Bank of Portugal put the debt at 369.6% of the national Gross Domestic Product.
On the plus side, public debt is expected to decline over the course of 2018 - especially after repaying €6.6 billion to the market in June.
The Bank of Portugal’s statistical report explains that there was an increase in company debt held by companies of €500 million and households and individuals recorded an increase in their debt to the financial sector by €200 million.
IMF's opinion
In the annual study on the eurozone published this Thursday, the IMF notes that "several countries with high debts, including Italy, Portugal and Spain, will continue to adjust little or nothing this year" in structural or permanent terms.
The idea, says the IMF, is that governments should tighten their accounts, taking advantage good times in the economy to reduce debt and prepare for more difficult times ahead.
"Regrettably, national budgetary plans are either very inadequate or going in the wrong direction," says the IMF, which reminds deviant countries in the eurozone that "better enforcement of fiscal rules is needed."
For the Washington institution, this also is the fault of the European Commission, which this year has allowed for some flexibility in the Pact, risking its credibility.
The IMF uses the European Commission's own calculations, saying that they show "unbalanced national fiscal policies," pointing to "little or no adjustment in countries such as Belgium, France, Italy, Portugal and Spain."
"Public debt ratios are expected to remain above 90% of GDP in more than a third of euro area countries by the end of 2019."
This is the obvious case of Portugal, which has one of the largest debt burdens in the developed world, concluded the IMF report.
Comments
It is the result of typical left-wing politics, which always leads to this situation. Spend, spend, spend, without fiscal responsibility and without creating a dynamic economic model to sustain it.
Your calculations are off by a factor of 1000.
Debt per person is €70,000. Still a lot of money.
Better yet order parliament to pass a law that nationalises the Bank of Portugal, and then order the Bank of Portugal to start issuing currency to pay this debt. It's only a matter of getting those printing machines working. Private banks do it IMF and the ECB do it, why can't governments issue their own currency. At least the BoP would be able to lend the money interest free. How much of €724.7 billion is interest? Oh I forgot we have muppets with conflicting interests running our governments and sadly we vote for these idiots every election, they call it a civic duty or is it democracy?.