President, public finance watchdog play down record debt figure

in News · 05-07-2018 14:15:00 · 0 Comments
President, public finance watchdog play down record debt figure

Portugal’s president, Marcelo Rebelo de Sousa, has played down the latest figures for state indebtedness, which show it at a historic high, arguing that this is a temporary blip and expressing confidence that the total will decrease in the next few months.

The Bank of Portugal on Monday released figures that showed the gross public debt in May at €250.3 billion.
“When the time for repayment comes, a few months from now, the amount of debt decreases,” de Sousa told journalist on Tuesday evening at an event in Belém, Lisbon. “You may ask: but why not wait for that time to go and contract debt to recycle and replace the previous [debt]? Because it is thought that at this moment it is preferable to go to the market than to wait for later moments.”
Later on Tuesday, the head of debt watchdog the Public Finance Council (CFP), Teodora Cardoso, also played down the May figures, stressing that the essential thing is to continue reducing the public sector budget deficit.

“It is nothing special”, Cardoso said of the May debt total at a talk in Lisbon. “What happened was that, although the deficit has fallen considerably, it was necessary to amortise debt from the past” by borrowing a large amount.
Portugal’s prime minister, António Costa, has meanwhile reiterated his government’s declared objective of continuing to reduce the state’s mountain of debt, stressing that progress is measured on an annual basis and not by how things are going from month to month, in a reaction to a new peak of indebtedness reported by the Bank of Portugal.
“Our objective is the one that we have maintained, [of] continuing the reduction of the deficit, maintaining a ... primary surplus and continuing the trajectory of debt reduction, as is stated in the Budget [for 2018] and as is stated in the Stability Programme” submitted to the European Union, Costa told journalists at a joint news conference in Lisbon with Spain’s prime minister, Pedro Sánchez.
Confronted with the latest debt figure, the prime minister said that “the trajectory of the debt is known” and that this year it would be reduced “for the second consecutive year”. He stressed that “the evolution of the debt is measured annually and not from month to month, because there are various operations over the whole year.”
The previous record high for the debt was €250.296 billion, in August last year.


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