The Portuguese government announced that in 2021 the public debt ratio had registered the biggest drop since the Second World War, after having risen in a record way in 2020 because of the pandemic. However, according to Eurostat data, Portugal was the third country that most reduced public debt last year, behind Greece and Cyprus. In addition, it continues to have the third highest ratio in the EU.
According to a report by ECO, Portugal's public debt fell by 7.8 percentage points from 135.2% of GDP in 2020 to 127.4% of GDP in 2021. However, it had risen by 18.6 percentage points from 2019 (116.6% of GDP) to 2020 because of the double impact of the pandemic on debt and GDP.
In the case of Greece, where the ratio fell by 13.1 percentage points, public debt dropped from 206.3% of GDP in 2020 to 193.3% of GDP in 2021. Cyprus saw its ratio shrink from 115% of GDP in 2020 to 103.6% of GDP in 2021, minus 11.4 percentage points. They were the only member states of the European Union to reduce debt more than Portugal.
Despite this strong reduction in the ratio, Portugal continues to have the third largest public debt in the European Union, only surpassed by Greece and Italy. The objective of the current Government is to remove the country from the club of the most indebted countries in the EU, being replaced by France, Belgium and Spain. By 2026, the goal is to get close to the psychological threshold of 100% of GDP.
“We want and we will be able to remove Portugal from the group of economies with the highest public debt in Europe”, said Fernando Medina this Wednesday in the opening speech of the debate on the 2022-2026 Stability Program, explaining that this is “not because we want any distinction, but because this is the best way to defend companies and families”.
Geeat news Portugal on your debt reduction progress. I think however I am only one of many who would like to bring investment to Central Portugal in the form of restoring or building new houses. 30 to 50 square meters is much too small. Portugal has developed good roads, 5G and other infrastructure. By limiting this new investment in housing, Portugal is ignoring an enlarged tax base, jobs for local tradespeople, sale of materials and then ongoing consumer spending in this region. It is hard to open a locked door.
By Warren Shalm from Other on 23 Apr 2022, 22:22
What's the obsession with 5G @ the previous commenter?? Don't get me wrong, I don't think it causes Covid, but I struggle to see what it has to do with infrastructure or investment. I can stream HD video with 3G, 4G is more than anyone needs. 5G has to be the biggest waste of money ever in pursuit of something no-one asked for. Not to mention no safety testing as per usual with modern scientific interventions.
By B P from Alentejo on 24 Apr 2022, 13:25
Bravo Portugal, you're doing great, you'll be debt free soon enough, other countries can learn from you.
By Lisa from Other on 25 Apr 2022, 16:36
@ B P from Alentajo That's kind of like saying we don't need roads because I don't drive a car... By the way I have 3G only but am aware the world is changing. My comment was also not about developing more infrastructure but better using what was there in a way to bring in economic growth. We can't complain about low wages and then deny a means to drastically increase them. Just my opinion of course.
By Warren Shalm from Other on 25 Apr 2022, 17:20