The Portuguese economy provided external financing of 2.7% of Gross Domestic Product (GDP) in 2023, the highest annual financing capacity in 10 years, according to the Bank of Portugal (BdP).
“In 2023, the Portuguese economy provided external financing of 2.7% of GDP, the highest annual financing capacity since 2013,” the BdP said in a statement released today on the interconnections between sectors in the national financial accounts.
The financial sector, public administrations and private individuals presented financing capacities of 2.5%, 1.2% and 1.0% of GDP, respectively, in 2023, while non-financial companies “were the only resident sector to present a financing need (1.9% of GDP)”.
Households made a net contribution of 4.7% to general government financing, to which the acquisition of savings certificates (5.4%) in the first six months – when a series with high yields was in force – contributed.
“This acquisition was partially offset by the amortization of Treasury certificates (1.6% of GDP),” said the BdP. The transfer of the assets and liabilities of the Caixa Geral de Depósitos Pension Fund to the Caixa Geral de Aposentações (CGA) in the first quarter of 2023 weighed 1.1% of GDP on net financing from private individuals to public administrations.
Net borrowing of 4.1% and 2.4% of GDP from the rest of the world and the financial sector, respectively, resulted “largely from the reduction in these two sectors’ investments in public debt securities”.
The financial sector financed households to the tune of 2.9% of GDP and non-financial companies to the tune of 2.3% of GDP.
Financing to private individuals was influenced “both by the reduction in deposits with banks and by the transfer of assets and liabilities from the Caixa Geral de Depósitos Pension Fund to Caixa Geral de Aposentações”.
Financing for non-financial companies also came from the reduction in deposits with banks, but also from the increase in debt securities issued by non-financial companies held by the financial sector.
The rest of the world financed non-financial companies to the tune of 1.2% of GDP through the acquisition by non-residents of shares and other holdings issued by non-financial companies, an element partially offset by the reduction in loans, points out the BdP.
