Portugal's Public Debt Sinks to 88.4 Percent of GDP, Its Lowest Since 2009, After July's Big Repayments to Creditors
The Banco de Portugal puts public debt at 88.4 percent of GDP at the end of September, down 4.2 points in a quarter and the lowest ratio since 2009. Debt stood at 284.9 billion euros after a 2 billion euro repayment to an EU bailout fund.
Portugal's public debt fell to 88.4 percent of gross domestic product (GDP) at the end of September, down 4.2 percentage points from 92.6 percent at the end of June, the Banco de Portugal said in its monthly statistical note on public debt, published on Monday 2 November. On the central bank's own quarterly series, it is the lowest end-of-quarter ratio since the end of 2009, when it stood at 87.6 percent.
For residents, nothing changes directly: no tax, pension or benefit moves because of this figure. What a falling debt ratio does is ease pressure on the state budget, because less public money goes on interest, and it helps keep the rates at which Portugal borrows low.
What the numbers show
The figure is debt "in the Maastricht sense" (ótica de Maastricht), the EU definition used to judge member states' public finances. According to the Banco de Portugal's BPstat database:
- General government debt stood at about 284.9 billion euros at the end of September, about 0.7 billion less than in August.
- Over the third quarter it fell by about 8.8 billion euros, from 293.7 billion at the end of June. Most of that drop came in July, when debt fell by about 7.5 billion euros.
- A year earlier, at the end of September 2025, debt was 294.7 billion euros, or 96.9 percent of GDP.
The central bank put September's fall down mainly to lower loans (minus 2.2 billion euros), after a scheduled repayment of 2 billion euros to the European Financial Stabilisation Mechanism, one of the lenders from the 2011 bailout, as quoted by Jornal de Negócios and ECO. Pulling the other way, deposit liabilities rose by 0.8 billion euros as households bought savings certificates (certificados de aforro), and debt securities rose by 0.6 billion, mainly from net issuance of Treasury bonds.
The state's cash also grew. Public sector deposits reached 27.9 billion euros, 2.8 billion more than in August, so debt net of those deposits fell by 3.5 billion euros to 257 billion, ECO reported from the note. That net measure equals 79.8 percent of GDP, down from 82.7 percent in June, on BPstat figures.
Why the ratio rose in the first half and then fell
Our report on Eurostat's second-quarter figures gave a ratio of 92.5 percent for June; the Banco de Portugal's current series shows 92.6 percent for the same quarter. The rise in the first half had been expected: Jornal de Negócios reports that the Treasury concentrated its bond sales early in the year to meet a 9 billion euro wall of repayments to creditors in July. Once that money was paid back, debt came down.
The ratio compares debt with the size of the economy, so it falls both when debt shrinks and when GDP grows. The note's headline figures do not split the 4.2 point drop between those two effects.
What comes next
The Finance Minister expects the ratio to end 2026 at 87.5 percent, Jornal de Negócios reports, below the 89.2 percent the Banco de Portugal records for the end of 2025. The final vote on the 2027 budget is set for 24 November. For the state's day-to-day finances, see our report on the 5.1 billion euro surplus in the public accounts to September.
