Household, corporate and state debt rose by €12.9bn at the end of the first half, pushing the economy’s total debt to a record €806.9bn in June, data shows which the Bank released this Wednesday. of Portugal (BdP).
This is the sixth month in a row in which non-financial sector debt has increased, with €442 billion of total debt related to the private sector (private companies and individuals) and €364.9 billion to the public sector ( governments). and public companies).
Regarding the weight of the economy’s debt in gross domestic product (GDP), the central bank reveals that the ratio has fallen from 331.9% at the end of 2022 to 320.3% in the first half of 2023, and that both public sector debt, while that of the private sector fell from 146.9% to 144.8% and from 185.0% to 175.4% respectively.
This decline will be driven by GDP growth, the central bank explains: “In the first half of 2023, the higher GDP growth than the debt burden led to an evolution of the debt burden indicators of the non-financial sector, as a percentage of the GDP, as opposed to observed for nominal values.”
The public sector was the one that weighed the heaviest on the bills
While the private sector continues to assume a greater weight in global accounts, the public sector was the main driver of the economy’s debt increase until June.
The increase amounted to 13.4 billion euros and mainly took place on the side of households (10.6 billion euros), which invested heavily in savings accounts, and governments (5.9 billion euros). “On the other hand, the debt of the public sector abroad decreased by 4.3 billion euros,” indicates the institution headed by Mário Centeno.
The private sector, in turn, saw its debt fall by EUR 600 million, while private debt fell by EUR 700 million, mainly that of banks. As a counterbalance, companies increased their debt by €100 million, reflecting a €300 million increase in debt to the financial sector, partially offset by a reduction of €200 million in debt to households.
Compared to the same period last year, private corporate debt grew by 0.6%, while that of individuals increased by 0.9%.
Debt has continued to rise in both sectors, “although the annual rate of change decreased by 1.6 and 3.2 percentage points, respectively, compared to the end of 2022,” the BdP points out.
Source: DN
