Non-Financial Sector Debt in Portugal Falls to 277.9% of GDP in 2025

The debt index of the non-financial sector in Portugal fell to 277.9% of Gross Domestic Product (GDP) in 2025, the lowest value since the beginning of the Banco de Portugal (BdP) series, in the fourth quarter of 2007.

Although debt increased in nominal terms, economic growth was sufficient to reduce the debt burden on the economy.

Data published this Monday, 23, by the BdP indicate that the aggregate amount of debt in the non-financial sector reached 851.3 billion euros in 2025. Of this total, 480.3 billion relate to the private sector (private companies and families) and 371 billion to the public sector (public administration and public companies).

In percentage terms, the reduction in the total ratio to GDP translated into a decrease of 6.2 percentage points compared to 2024. Public debt fell from 124.1% to 121.1% of GDP, while the weight of private sector debt fell from 160.0% to 156.8%.

Despite the reduction in the overall ratio, nominal debt continued to grow, as the non-financial sector aggregate rose by 28.9 billion euros throughout the year.

In the public space, the increase in debt in 2025 was 11.7 billion euros, a growth that, according to the BdP, was mainly concentrated in liabilities with non-resident entities. This movement resulted, to a large extent, from investment by non-residents in Portuguese debt securities, which increased by around 13.4 billion euros.

In the private sector, developments were uneven. Private companies recorded a 2.5% variation in their annual debt, while families increased their debt by 8.8% in the same period.

The BdP points to real estate credit as the main component responsible for the increase in household debt, with an increase of 12.5 billion euros in the financial sector.

In sectoral terms, at the end of 2025 the activities with the greatest weight in the debt of private companies were commerce, transport, accommodation and restaurants, and industries, electricity, gas and water. These sectors, together, represented 54% of private corporate debt, reflecting the exposure of the business fabric to investment-intensive segments and subject to different demand cycles.