Portugal Debt Clock 


Or about:

Portugal Gross Government Debt (Maastricht Debt).
Calibrated from data from Direcção Geral do Orçamento e Banco de Portugal.
more debt clocks...

More debt clocks:
US Gross Federal Debt Outstanding
US External Debt
Portugal Government Debt
Portugal External Debt


Portuguese government debt (Maastricht debt) keeps riding significantly ahead of Portugal's GDP, especially since June 2011, when right-wing Coelho took office as Prime Minister. To be fair, socialist Costa did not perform much better since he took over on November 2015, although the situation has shown some marginal slack. The debt upward trend contrasts gloomily with the practically flat trend of GDP (trends are given by slope of the dotted regression lines in the chart). Such facts strongly suggest the sheer emptiness of both socialist and rightist claims that each one is more capable than the other to cure the country's financial ailments. In fact, current instances of left and right politics cannot and will not promote anything but identical policies that replicate similarly innocuous results — forget the labels.

Government debt is not inherently bad, but it may be a curse under some circumstances. Similar in this speicif respect to private debt, government debt may dissolve all by itself if inflation runs into higher gear. Unfortunately for Portuguese finance's managers, inflation has been and will likely remain inconsequential for yet some time. Debt may also remain a lesser evil if income (fiscal income generated by a swelling GDP) grows at a fast pace. However, if and when debt runs far ahead of GDP, the amount of work and wealth that the nation has to put aside to pay for interest on the debt becomes an overburden, diverting resources from other more advantageous uses: well-being, public health, education, infrastructure, social solidarity, employment, etc. In the case of Portugal, not only debt runs far ahead of GDP, but it also runs quite faster (the slope of the debt regression line is 1,041, against an irrelevant 31 for GDP, for the period covered in the chart). This simply means that a chunkier slice of wealth is being allocated to interest remuneration and loan payback, in pure waste for the nation. Quite a dismal scenario. Government cash-flows will be hard pressed to sustain the current set-up for much longer.

Another issue is the usage made of the debt. The general rule should be to use debt to finance activity whose rate of return is greater than the interest rate to be paid to debt holders. In the case of Portugal, and in a context of low inflation, this has not been the case, with the result that the growing debt has been inducing nothing but further belt-tightening and overspread impoverishment.



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