Portugal Exits List of Top Five Most Indebted EU Countries

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Published on 23 January, 2024 • Last updated on 23 January, 2024

By Portugal Homes

Portugal Exits List of Top Five Most Indebted EU Countries

The most recent Eurostat Data has shown that the Portuguese Fiscal Responsibility policy has finally paid off: the country is no longer on the list of the top five most indebted EU countries. The recent news underscores the impressive economic development the Iberic country has shown in recent years, proving to be a great place for settling an investment.

Portugal saw a substantial reduction in its public debt during the third quarter of 2023, as indicated by recent data from Eurostat, the statistical office of the European Union (EU). The report released on 22nd January 2024 also highlights the declines in public debts for both the Eurozone and the European Union, reaching 89.9% and 82.6% of their respective GDPs. Notably, Portugal secured the second-largest year-on-year decrease, marking an impressive drop of 10.9 percentage points.

What is the Eurozone and why this is related to Portugal?

The eurozone is the informal term used for the 20 European countries that are part of the European Economic and Monetary Union (EMU) and have embraced the Euro (€) as their shared currency. Portugal is also part of the economic block and has been officially a member of the European Union (EU) since 1986, marking a significant milestone in its integration into the broader European community.

Portugal demonstrated its commitment to European economic cooperation by being among the early nations to embrace the Euro currency on January 1, 1999. This move reflected Portugal's dedication to fostering economic collaboration and unity within the European Union and opening its economy to international investments.

Eurostat Overview of the EU Public Debt Trends in Q3 2023

Eurostat numbers showcase the improvement of the Eurozone, now with its public debt inched down to 89.9% of GDP. The news is important to explain the strength of the Euro, the official currency, in the face of all economies in the world. Across all 27 EU Member States, the indicator declined to 82.6%, reflecting a drop from the third quarter of 2022 (84.6%) and the second quarter of 2023 (83.0%).

In the year-on-year comparison, public debt increased in eight member states, while 19 witnessed reductions. Notably, the highest public debts in the third quarter of 2023 were observed in Greece (at 165.5% of GDP), Italy (at 140.6%), and France (at 111.9%). On the opposite end of the spectrum, Estonia (at 18.2%), Bulgaria (at 21.0%), and Luxembourg (at 25.7% of GDP) presented the lowest figures.

How Portugal Recorded Impressive 10.9% Drop in Public Debt?

Portugal showcased the second-largest decline in the public debt, with a significant 10.9 percentage points drop. Now with its public debt reduced to 107.5% of the national GDP, Portugal is no longer one of the five most indebted countries in the European Union. The incredible economic recovery is been highlighted in the news across the European Union.

Portugal recorded the third-largest quarter-on-quarter reduction, with a decrease of 2.5 percentage points, following Cyprus (5.6 percentage points) and Luxembourg (2.6 percentage points). The data also reveals the negative numbers related to the most substantial quarter-on-quarter increases in public debt between July and September 2023 with Belgium (2.1 percentage points), Latvia (1.9 percentage points), and Slovenia (1.0 percentage points).

Investor Insights: Portugal's Financial Attractiveness Unveiled

Portugal positioning itself among first-world countries, can manage its economy splendidly. The observed reduction not only brings Portugal's debt closer to the European Union (EU) average but also aligns seamlessly with the government's dedicated efforts to uphold fiscal responsibility. This journey of economic recovery showcases the country's unwavering commitment to ensuring financial stability within the Eurozone and the broader European Union.

From an Investor's perspective, Portugal not only proved to be a good place for investment but also a stable country where one can settle and have a favourable life. The marked decrease in public debt indicates a resilient and well-managed economy navigating the complexities of evolving global economic conditions, especially in a post-pandemic scenario.

The Portuguese Residency by Investment appears as one of the best solutions for investors looking to settle in a country with economic and political stability, and a European quality of life. One of the best residency programmes in Portugal is the D2 Visa, allowing third-country nationals to invest directly in the Portuguese economy by opening a new business or branching out an existing one in Portugal. This Visa is not only the easiest way to access EU residency, but also the fastest. Through the D2 Visa, you and your family can attain the Residency as soon as 3 months from the application process time.

Portugal Homes's in-depth analysis aims to provide a comprehensive understanding of the financial appeal of Portugal, offering valuable insights for those navigating the investment landscape in this dynamic and promising market.



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