Euro banknotes and coins in front of the national flag of Portugal

Portugal ends 2023 with highest growth in EU

Country congratulated for bringing debt below 99% of GDP

Portugal ended 2023 with the highest economic growth of the EU’s 12 best performing economies.

That doesn’t mean it was the highest economic growth ever: 2022 almost tripled the growth of 2023’s last quarter, but in the current economic landscape, no other country did better.

Another plus has been the feat of bringing down domestic public debt to below 100% of GDP last year.

The accomplishment has seen European commissioner for the economy Paolo Gentiloni congratulate the country in a tweet, describing what he termed an “impressive achievement”.

“Congratulations, Portugal,” he wrote over social media network X: “a reduction of 35 (percentage) points in four years is an impressive achievement and a testament to the efforts made since the financial crisis to build a more sustainable, competitive and inclusive economy.

With so much going wrong for the government (viz protests most recently by farmers/ police/ health service personnel, not to mention ‘the people’ out in force last weekend decrying the housing crisis), prime minister António Costa has seized the moment to himself write over X: “The data is clear: Portugal with the highest growth in the European Union; employment at an all-time high; debt below 99% of GDP. This is good news. We start the year with confidence and with increased hope for the future“.

Data published today by the Bank of Portugal (BdP) shows the public debt ratio standing at 98.7% – the lowest figure since 2009, writes Lusa.

The weight of public debt to GDP fell 13.7 percentage points (pp.) from the 112.4% recorded in 2022, falling below the 103% officially forecast by the government and reaching a year earlier the ratio projected for 2024 (98.9%).

Governor of the Bank of Portugal (BdP), Mário Centeno, had already signalled that the debt burden would fall below the symbolic target of 100% of GDP, which “hasn’t happened for many years”.

Speaking at the opening of the Banking Forum, organised by the Jornal Económico newspaper in Lisbon, Centeno said the reduction “is not an accident, it’s not a situation that happens by chance (…) It’s the result of an effort made by families, companies and, necessarily, the State”.

Correio da Manhã this morning puts the effort made a little more into context: every single day last year the State was raking in an average of €180 million in taxes, says the paper. “With this kind of income, it is not surprising that in spite of effective State spending having increased by 9%, between what it owed and what it received there was €4.3 billion left over”.

Thus the final growth percentage for the last quarter of 2023 came to 2.2% (which is still a long way off the growth of 6.8% in 2022).

But in the international context, Portugal was a full two percentage points ahead of Spain, and behind Spain came Belgium – 1.6%; France – 0.7%; Italy – 0.5%; Lithuania – 0.3%, the European Union as a whole – 0.2%; the eurozone – 0.1%, Sweden – 0%, and then countries with negative growth: Czech Republic/ Latvia and Germany all on -0.2%; Austria -1.3% and Ireland on -4.8%. ND

Source material: LUSA