XTB analysts point out that "Portugal's transition to a democratic regime coincided with significant efforts to modernize infrastructure, expand social services, and integrate into the European and global economy, challenges that often required increased public spending and debt accumulation."

In 1974, after April 25, the Portuguese public debt increased by more than 70% compared to the same period of the previous year (1973), standing at 17% of the Gross Domestic Product (GDP), according to the brokerage data.

The escalation of Portuguese debt continued and the country was forced to ask for help from the International Monetary Fund in 1977 and 1983, "which had no impact on debt reduction."

In 1977 and 1978 the public debt amounted to 30% of GDP and 33% of GDP, while in 1983 and 1984 it stood at 45% and 48%.

"With Portugal's entry into the European Union, and the subsequent adoption of the euro, Portugal faced new fiscal and monetary demands that redefined the management of public debt," the analysts recall.

The upward trend continued, although the growth rate slowed from the 1990s, a decade in which the country began to feel the greater impact of integration, with the availability of European funds used to invest in infrastructure and modernization projects.

Looking at the weight of debt to GDP, in the years of the financial crisis and sovereign debt, the country's indebtedness soared, but in recent years, the trend has been reversed and last year, for the first time in 14 years, Portugal's public debt fell below 100% in relation to GDP.

"Over these 50 years, Portugal has increased its debt exponentially, but it has also increased its production exponentially. However, debt growth became much more sustainable following the sovereign debt crisis that haunted Europe," the analysts recall.

XTB's note highlights that the public debt has been falling since 2020 and has not reached values below 100% in relation to GDP for more than 14 years, reflecting "increases in national production, namely in sectors such as tourism that have been registering a significant increase and, at the same time, the increase in the State's tax burden, which has been reaching record levels."

"In addition to all this, the public debt fell in nominal terms in 2021 and 2023, something that we can consider an important milestone. This effort allowed the public debt to converge with the average of the eurozone," it points out.

For analysts, at a time when interest rates remain high, the fact that the debt/GDP ratio is decreasing demonstrates that Portugal's growth capacity is higher than its borrowing capacity.

"Compared to 50 years ago, the country is more indebted, but in a much more favorable situation," he points out.

In 2023, Portugal registered a public debt ratio of 99.1% of GDP, according to data from the Bank of Portugal.

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