The Portuguese economy registered an external surplus of 2.1 billion euros in the first six months of the year, a value that corresponds to 1.6% of the half-yearly Gross Domestic Product (GDP) and which compares with a deficit of 2.9 billion euros in the same period.
According to data released by the Bank of Portugal (BdP), this performance "is mainly due to the results of the second quarter of the year", when the balance of the current and capital accounts reached 1.5 billion euros, notes the institution led by Mário Centeno. Until March, the same balance amounted to 582.5 million euros.
The decline in the goods account deficit and increases in the surpluses in the services and capital accounts contributed specifically to the evolution of the external accounts.
With regard to the balance of goods, there was a decrease of 531 million euros in the deficit, with exports growing more than imports. While exports of goods grew by 3.3% up to June, to 1.2 billion euros, imports rose by 1.4%, to 692 million.
The balance of services, in turn, registered an increase of 3.8 billion euros in the surplus, with the evolution of the travel and tourism balance justifying more than half of the variation with an increase of 1.9 billion euros. The capital balance grew by 725 million euros, "essentially due to the greater receipt of investment aid and the greater transfer of carbon licenses", points out the regulator.
As for the financing capacity of the national economy, the BdP states that the first half resulted in a financial account balance of 2.8 billion euros, as a result of the increase in external assets, which was higher than the increase in liabilities.
Specifically, external assets rose by EUR 6.6 billion, as a result of investment by public administrations and banks in securities issued by non-residents, as well as the increase in loans granted by companies to non-resident entities.
On the other hand, liabilities totalled 3.8 billion euros, mainly due to the increase in deposits by non-residents in national banks (8.1 billion euros), which was partially offset by the reduction in external liabilities of the central bank (-5.8 billion euros).
According to the supervisor, the sectors that most contributed to the positive change in Portugal's net assets vis-à-vis the rest of the world were the central bank (6.9 billion euros), general government (4.4 billion euros ), and non-monetary financial institutions (EUR 1.5 billion).
The remaining financial and monetary institutions and insurance companies and pension funds, in turn, showed negative changes in their net assets, of €8.9 billion and €1.2 billion, respectively.
In this sense, Portugal's net external debt was reduced from 67.6% of GDP (161.6 billion euros) at the end of 2022 to 61.4% (154.7 billion euros) in second quarter of 2023. "This is the lowest ratio observed since June 2007", indicates the BdP.
Source: CCIPV / The Portugal News