Net external debt drops to 76.8% of GDP, the lowest value since 2008 – Economy


Portugal’s net external debt fell to 76.8% of Gross Domestic Product (GDP) in the first half, the lowest value since the end of 2008, totaling 170,000 million euros, the BdP announced this Friday.

As a result of the country’s International Investment Position (PII), excluding equity instruments, bullion and financial derivatives, “it was reduced from 81.0% of GDP at the end of 2021 (171,100 million euros) to 76.8 % (170,000 million euros) at the end of June 2022”, said the Bank of Portugal (BdP).

According to the entity, this is the lowest ratio observed since the end of 2008.

In June, the PPI, that is, the balance between foreign financial assets held by residents and liabilities issued by residents and held by the rest of the world, went from -96.1% of GDP (-203,100 million euros) at the end of 2021 to -93.1% of GDP (-206,100 million euros) at the end of June 2022.

“The contrast between the evolution of IIP, in nominal terms and as a percentage of GDP, was due to the growth of the national economy”, pointed out the BdP.

The nominal change in IIP was mainly due to the negative contribution of the devaluation of debt securities issued by non-residents and held by the Portuguese financial sector, the devaluation of Portuguese public debt securities held by non-residents, the negative contribution of financial transactions (-2,200 million euros), positive exchange rate variations on foreign assets held by residents, mainly expressed in US dollars and Angolan kwanzas (3,800 million euros).

From the reduction of 3.1 percentage points (pp) in the negative ratio of IIP to GDP, -1.3 pp resulted from the nominal change in IIP and 4.4 pp from GDP growth, pointed out the BdP.

International investment position statistics will be updated by the BdP on 18 November.


Source: Jornal de Negócios by www.jornaldenegocios.pt.

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