Public debt woes: Too high (again!) – but beleaguered Bank of Portugal says otherwise

Portugal’s public debt stood at to 128.7% of GDP by the end of 2014. This is above the level set by the government in its 2015 state budget – but the Bank of Portugal has been been quick to give the figure a different spin.

“It could have been higher” is the strategy used by the bank which is rapidly losing credibility on the national and international stage (see: https://www.portugalresident.com//new-zealand-retirement-fund-sues-bank-of-portugal-over-its-“unlawful”-handling-of-bes-debacle).

As Sol news website writes this morning, public debt has increased since 2013 and is over the limit set by the current coalition government.

But according to the Bank of Portugal it is less than the levels registered in the third quarter of last year.

That level (131.4%) was what set alarm bells ringing in Brussels, leading to troika lenders to doubt the mathematics of Finance Minister Maria Luís Albuquerque.

Europe now has far greater things to worry about however than Albuquerque’s financial projections.

Last week, German finance minister Wolfgang Schäuble hailed Portugal as a success story proving that Europe’s policies of austerity worked.

Sol points out that the effective increase in public debt puts the country at 1.5% over-budget.

In real terms this corresponds to a public debt of €224,477 million in December last year, as opposed to €219,225 million in December of 2013.

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