Portugal’s Fiscal Triumph: Surpassing EU Peers in Debt Reduction

Portugal has achieved a remarkable feat in reducing its public debt, outperforming other European Union nations. According to data from Eurostat, Portugal witnessed a significant year-on-year decrease of 13.3% in its debt-to-GDP ratio during the last quarter of 2023. This reduction surpasses the average debt reduction of 2.3% seen across other Eurozone countries. Only Greece came close to Portugal's achievement, with a 3.4% decrease in its debt ratio.

Most of the Portugal's debt reduction occurred in the last quarter of the year, with a substantial quarter-on-quarter contraction of 8.4% in the debt-to-GDP ratio. In comparison, the average debt reduction in the Eurozone was 1.1%, while for European Union member states, it stood at 0.7%.

Despite ending 2023 with a public debt equivalent to 99.1% of its GDP, which is the lowest ratio in the past 14 years, Portugal still maintains a debt ratio above the Eurozone average of 88.6% and the European Union average of 81.7%. The countries with higher debt ratios than Portugal are Greece (161.9%), Italy (137.3%), France (110.6%), Spain (107.7%), and Belgium (105.2%).

Portugal's achievement in reducing its public debt showcases its commitment to fiscal consolidation and responsible economic management. It reflects positively on the country's efforts to strengthen its financial stability and improve its economic outlook within the European Union.

While Portugal continues to face challenges in lowering its debt ratio further, its significant reduction in public debt serves as a testament to the effectiveness of its economic policies and sets a positive precedent for other nations grappling with high debt burdens in the region.