Portugal's Public Debt Ticks Back Up to 92.9% of GDP in the Second Quarter
The debt ratio rose to 92.9% of GDP between April and June, up 1.9 points on the first quarter but still well below last year's level, Bank of Portugal figures show.
Portugal's public debt climbed to 92.9% of gross domestic product in the second quarter of 2026, up from 91% in the first three months of the year, according to figures released on Sunday by the Banco de Portugal (Bank of Portugal). In cash terms, the stock of government debt reached €293.9 billion, an increase of €5.2 billion over the quarter.
The 1.9-percentage-point rise interrupts the downward trend that has flattered Portugal's public accounts in recent years, but the picture remains comfortably better than a year ago. In the second quarter of 2025 the ratio stood at 96.5% of GDP, so the debt burden is still 3.6 points lighter than it was twelve months earlier. The country ended 2025 at 89.7% — its lowest reading since 2009.
What drove the increase
The central bank attributed most of the quarterly jump to the issuance of debt securities, which added €4.7 billion, largely in long-term bonds. A further €0.5 billion came from deposit liabilities, driven chiefly by a €0.6 billion inflow into Certificados de Aforro (Savings Certificates), the state-backed retail product that households have continued to favour.
Some of that borrowing is being parked rather than spent. Deposits held by the public administration rose by €6.6 billion to €31.4 billion over the quarter. Stripped of those cash balances, the Treasury's net debt — the figure the government prefers to highlight — stood at €262.5 billion.
The road to 87.5%
Despite the quarterly uptick, the Ministério das Finanças (Ministry of Finance) is sticking to its forecast that the ratio will fall to 87.5% of GDP by the end of 2026. Meeting that target depends on continued economic growth, disciplined spending and the seasonal pattern of debt issuance, which tends to front-load in the first half of the year before easing.
For residents, the debt ratio is more than an abstract statistic. A lower burden gives Lisbon more room to keep borrowing costs down and shields the budget from swings in interest rates — a live concern as Euribor rates have begun edging lower again. It also feeds directly into Portugal's standing with the European Commission and credit-rating agencies, which in turn shapes the yields the state pays on new bonds and, indirectly, the cost of mortgages and business loans across the economy.
The second-quarter reading confirms that Portugal remains one of the euro area's more heavily indebted members, even as it outperforms several southern European peers on the trajectory. Whether the government hits its year-end goal will become clearer when the third-quarter figures land in the autumn.
