Over the last 25 years, Portuguese public debt has increased in nominal terms. The growth was particularly pronounced between 2008 and 2012, a period marked by the international financial crisis and the subsequent sovereign debt crisis in Europe.

The 2008 financial crisis worsened the country's economic situation. Public interventions to support the financial system, the effects of the recession, and measures to stimulate economic activity were reflected in an increase in debt.

In 2011, in the context of the sovereign debt crisis, Portugal requested external financial assistance through the Economic and Financial Assistance Programme (EFAP). In that year, public debt reached €201 billion.

In 2025, public debt amounted to €275.1 billion, €4.2 billion more than in 2024.

 

 

To assess the burden of public debt in the economy, it is common to use public debt as a percentage of gross domestic product (GDP).

In 2002, this ratio was 60% of GDP, the benchmark value established by the Maastricht Treaty.

With the 2008 financial crisis and the sovereign debt crisis in Europe, from 2010 onwards, public debt increased and, for the first time in 2011, exceeded 100% of GDP.

From 2016 onwards, this indicator began a downward trend, interrupted only in 2020. In that year, in the context of the COVID-19 pandemic, the public debt ratio increased by 18 percentage points (pp), to 134.1% of GDP, the highest level in the last 25 years. This evolution reflected, among other factors, the measures to support the economy during the pandemic, the accumulation of liquidity by general government and the impact of the contraction in economic activity.

At the end of 2025, public debt represented 89.7% of GDP.

 

 

Public debt as a percentage of GDP can vary due to changes in the debt itself, GDP, or both.

Over the last 25 years, two periods stand out. Up to 2014, apart from 2000 and 2007, the increase in the ratio was mainly driven from public debt growth. Between 2015 and 2025, except for 2020, the reduction in the ratio was mainly due to GDP growth.

In 2025, the debt ratio decreased as GDP growth more than offset the increase in public debt.

 

In Portugal, general government is divided into three subsectors i Central government operates throughout the national territory and includes, for example, ministries and central state services, excluding social security. Regional and local government operates only in part of the territory and includes the autonomous regions, municipalities, and parishes (except for local social security centers). Social security funds are responsible for paying pensions, allowances, and other social benefits. : central government, regional and local government, and social security funds.

 

Central government accounts for almost all the public debt, representing between 94% and 96% of the total.

The debt of regional and local government reached its highest value in 2008: it represented 6.4% of the total public debt. From that year onwards, its share decreased, standing at 3.8% in recent years.

The composition of debt in this subsector has also changed. The share of the regional governments of the Azores and Madeira increased from 30.4% in 2000 to 72.9% in 2025. Conversely, the share of local government decreased, accounting for 27.1% of the combined debt of regional and local government in 2025.

 

Throughout the entire period, general government financed itself primarily through the issuance of debt securities, such as Treasury bonds and bills. In 2000, these securities represented 71% of the public debt, while cash and deposits accounted for 20% and loans for 9%.

 

 

In the 2000s, the debt structure remained relatively unchanged. In 2010, the share of debt securities and loans in total debt had increased slightly, while the share of cash and deposits had decreased.

Between 2011 and 2014, the composition changed significantly. Loans increased sharply in the context of EFAP financing, reaching over 40% of total public debt. Conversely, the weight of securities fell to less than half.

From 2015 onwards, this trend reversed. Loans lost share again and debt securities regained importance, as EFAP financing was replaced by a return to the markets.

In recent years, cash and deposits have regained importance, reflecting the increase in household investments in Treasury certificates and, especially from 2022 onwards, in savings certificates.

In 2025, debt securities continued to dominate the public debt structure, representing 58% of the total, of which 51% corresponded to Treasury bonds, 3% to Treasury bills and 2% to bonds issued by the Autonomous Regions.

Loans accounted for 24% of total debt, mainly from European instruments, namely 9% from the European Financial Stability Facility (EFSF), 7% from the European Financial Stability Mechanism (EFSM), 2% from the SURE Programme (Support to mitigate Unemployment Risks in an Emergency), and 1% from the Recovery and Resilience Plan (RRP).

Cash and deposits accounted for 18% of the total (15% savings certificates and 3% Treasury certificates).

Compared with the pre-crisis period, the public debt structure at the end of 2025 was less concentrated in debt securities and more in loans.

 

The main holders of Portuguese public debt are the Banco de Portugal, banks, households, insurance companies and pension funds, and non-resident investors.

Over the past 25 years, the relative share of these groups has varied. During the sovereign debt crisis and in the subsequent years, official loans, first through the EFAP and more recently through the SURE Programme and the PRR, contributed to an increase in the share of non-resident investors.

The resident banking sector also strengthened its position. The same applies to the Banco de Portugal, mainly through the acquisition of securities under the framework of the Eurosystem's public debt purchase programs.

Households remained relevant, mainly through the subscription of savings instruments issued by the State, such as savings certificates and Treasury certificates.

By the end of 2025, non-resident investors held 47% of total Portuguese public debt, of which 19% corresponded to official European loans under SURE, PRR, EFSF and MEEF. The Banco de Portugal and resident banks held 22% and 10%, respectively, while households accounted for 18%.