In the comparison between the fourth quarter of 2022 and the third, the reduction was the largest. However, even with the decrease in the public debt ratio to 113.9%, this remains the third highest among Member States, according to Eurostat data.
The fall in Portugal's public debt ratio was 11.5 percentages (p.p.) in 2022, the third largest. Greece led debt reduction, retreating 23.3 p.p., followed by Cyprus, (-14.7 p.p.).
In the quarterly comparison, Portuguese debt fell by 5.9 percentage points (p.p.) compared to the third quarter of 2022, the highest in the European Union. Cyprus (-4.8 p.p.), Greece (-4.5 p.p.), Ireland (-4.4 p.p.) and Austria (-3.0 p.p.) followed.
These reductions were more expressive than the community average. The public debt ratio fell from 95.5% in 2021 to 91.6% in 2022 in the Euro Zone and from 88% to 84% in the EU.
Despite the significant reduction, Portugal continues to have the third-highest debt in the EU. It is only behind Greece, with a ratio of 171.3%, and Italy, which registers a debt of 144.4%. After Portugal (113.9%), there is Spain (113.2%), France (111.6%) and Belgium (105.1%).
On the other hand, the lowest debts as a percentage of GDP were presented in Estonia (18.4%), Bulgaria (22.9%), Luxembourg (24.6%), Denmark (30.1%), in Sweden (33%) and Lithuania (38.4%).
Good progress indeed. However, a falling debt to GDP ratio can still be achieved despite rising debt levels: it could be where debt increases at a smaller pace than GDP. In that case, it's not great news.
Debt to GDP ratios of over 100% are unhealthy and unsustainable: they imply interest payments consuming a large share of public spending.
For politicians to speak in terms of a debt ratio to GDP, rather than commit to reducing debt levels in absolute terms, is disingenuous.
By Billy Bissett from Porto on 24 Apr 2023, 10:48