The indebtedness of the Portuguese economy increased by 3.4 billion euros in May this year, says new data released by the Bank of Portugal.
It’s a new ‘historic maximum’, translating into a global debt of 729.6 billion euros – a little over half of which (410.1 billion euros) is held by the private sector.
According to the document, the increase owes itself in the main to the public sector – where debt levels rose by 2.5 billion euros.
Economists agree the numbers “represent a warning sign” – particularly for the next government coming in after the elections in October.
Said João Cerejeira, commentating for Rádio Renascença, “it’s a situation that would be good to correct.
“The Portuguese economy has in the past had interventions from the IMF – most recently it was the ‘troika’ – after a long periods of negative external deficits and very large increases in debt”.
Fears are that the country “could call into a similar process” (ie that history could be about to repeat itself).
Coincidentally, Finance minister Mário Centeno – the man under whose watch the economy’s debt is increasing so massively – is being tipped as a front-runner to take over the top job at the IMF once Christine Lagarde, the current figurehead, moves on to lead the European Central Bank.
Say reports, Centeno is one of four people under consideration and “would like” the job.
“There are various factors that could leave him well-placed”, says Expresso. But is prime minister António Costa prepared to lose him?
Days later it transpired that irrespective of whether or not Costa was prepared to lose Centeno, he is no longer tipped for the ‘top job’ which is now being contended by just three candidates: Jeroen Dijsselbloem, Kristalina Georgieva and Olli Rehn..