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Portuguese debt rises to 132.4 pct of GDP

English.news.cn   2014-05-23 08:43:19

LISBON, May 22 (Xinhua) -- The Bank of Portugal announced Thursday that the country's public debt rose to 132.4 percent of GDP in the first quarter this year, compared with 129 percent registered in 2013.

The country's public debt reached 220,684 million euros (301,498 million U.S. dollars) in March this year, according to preliminary data in the bank's statistical bulletin.

Public debt was 129 percent of GDP at the end of 2013, equivalent to 213,631 million euros, meaning the government debt ratio is increasing.

These figures come shortly after Portugal announced on Saturday it had ended its 78-billion-euro bailout with a "clean exit," despite expectations the country would ask for a precautionary credit line.

The country has suffered three years of harsh austerity to meet the goals set in the 78-billion-euro bailout it signed with its international creditors in May 2011, reducing spending and raising taxes, but still has to cut its budget deficit to 4 percent of GDP this year and 2.5 percent in 2015.

Portugal is aiming to reduce public debt to 60 percent of GDP until 2018, but Thursday's figures by the Bank of Portugal suggest the Portuguese government might be too optimistic.

Economist Joao Ferreira do Amaral told Xinhua the Bank of Portugal's figure come as "no surprise." "Public debt will only fall when there is robust growth, which right now isn't the case."

He said the government was perhaps being too optimistic, while pointing out that the current economic climate was very "uncertain" and depended on what happens in the Eurozone.

"We will only lower the public debt when we have fast growth. We cannot have fast growth in the Euro zone."

He added: "That's why I have defended that Portugal must exit the Euro zone. That's the only way we'll be able to lower our debt."

The government forecasts public debt to continue to rise this year compared with 2013, to 130.2 percent of GDP. But it forecasts debt will fall in 2015, to around 128.7 percent of GDP, and 116.7 percent in 2018.

In its Economic Outlook released on Tuesday the Organization for Economic Co-operation and Development (OECD) said Portugal should implement budget consolidation until 2013 if it wants to meet its GDP objective.

Editor: Yang Yi
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