Debts of Portugal grow again

Debts of PortugalPortugal had to endure another blow in terms of budgetary consolidation. Government debt of southern European country rose last year to 130.5% of gross domestic product (GDP), according to the data of the statistical office. The government expected this share is 127.7% of GDP. At the end of the third quarter the debt went even temporarily above the level of 133.7%. In 2015, it was 129% of GDP and in 2014 the record 130.6% of GDP. The European Union, however, has set a ceiling of 60% of GDP, which should be reached by the over-indebted countries.

According to the socialist government of the country it has managed to shrink the budget deficit last year to 2.1% of GDP from 4.4% in 2015. The country remains under the 3% limit, which is the official ceiling for the members the Eurozone. This year the government in Lisbon expects new reduction of the deficit and debt.

Portugal, which in 2014 managed to get out of the international bailout program, belongs together with Italy and Greece in the list of the most indebted countries in the Eurozone.

During the debt crisis the authorities in Lisbon received a total of 78 billion EUR from the European Union and the International Monetary Fund. About one third of the amount comes from the IMF, which required higher interest rates that the EU. From 2015 Portugal paid ahead of its obligations to the fund with money borrowed on international markets under more favorable conditions.