Portugal’s public debt, measured under the Maastricht convention, reached a new historical high in May as the government contemplates how to explain away a negative figure of €250.3 billion.
After a rise of €4.3 billion in April, public debt rose by €300 million in May to a record €250.313 billion, topping last August’s figure of €250.296.
According to the Bank of Portugal, which released the data on Monday, July 2nd, this rise in May reflects "an increase of €0.3 billion in loans relative to the end of April."
"Assets held by general government deposits decreased by €1.1 billion, with net government debt increasing by €1.4 billion over the previous month to €226.3 billion," explained the central bank led by Carlos Costa.
In the first three months of the year, the government debt-to-GDP ratio was 126.3%, worsening from 125.7% in December 2017.
The Government expects debt to decline to 122.2% in 2018 which may happen based on the data so far this year.
The numbers during the year are influenced by market borrowings and debt repayments or other operations that increase or decrease debt.
For example, public debt is expected to decline in June as €6.6 billion of a maturing bond has been written off.
What is the Maastricht reporting standard?
Debt in the sense of Maastricht, or reported public debt, covers all general governments in the sense of the national accounts: the State, other government bodies, local governments and social security administrations.
Debt in the sense of Maastricht is calculated in the framework of the national accounts but it is defined in a specific way. It does not include all financial liabilities but only cash and deposits, securities other than shares which are Treasury bonds (BTF and BTAN), fungible Treasury bonds (OAT), Euro medium term notes (EMTN), as well as loans; excluded are derivative products and other accounts payable.
It is a gross debt in the sense that we do not subtract from the liabilities the financial assets of general governments.
It is consolidated: excluded therefore from the calculation of debt are the elements of a government's debt held by another government. That is the case for example of the deposits of general governments with the Treasury.
Debt in the sense of Maastricht is evaluated in nominal value, that is, at the repayment value of the principal. As such, accrued interest not due or fluctuations in the prices of securities are not included in the evaluation of instruments, whereas the re-evaluation of the securities repayment value indexed to inflation (OATi, BTANi and CADESi) is taken into account.
