Portugal’s public debt has skyrocketed in the last six months of pandemic from 114% of GDP to 133.8%.
It’s an historic record, explain reports, higher even than the last year of the troika when public debt hit 132.9%.
“Even so, the key indicator of the health of public finances is doing better than the government’s own forecast in the supplementary budget in June when it saw public debt soaring to 134.4% in 2020”, says TSF radio news.
Reasons for the descent are the measures brought in to help the country through weeks of paralysis during lockdown, as well as ‘additional budgetary reinforcement of the SNS public health service’.
Warns TSF, the €1.2 billion ‘loan’ to TAP however has not been included in these 2nd trimestre calculations, and won’t be until the next evaluation in December.
Portugal’s ‘new debt record’ keeps the country ‘at the bottom of the heap’ in Europe, doing better only than Italy (‘well on the way to 150% of GDP, according to Bloomberg today) and Greece (looking like reaching 200%).
Back in May when the effects of the pandemic were becoming all too clear, the European Commission recommended that member states took “all necessary measures” to support their economies. Since then Brussels has devised an unprecedented programme of recovery funding (click here).