The central bank data indicates that the year-on-year decrease reflects the worsening of the trade balance deficits due to variations in the trade balance, primary income balance, and the increase in the surplus of the services balance.
In the first four months of the year, compared to the same period last year, the trade balance deficit increased by 1.834 billion euros, driven by an increase in imports (+1.5 billion euros) exceeding that of exports (-322 million euros).
Simultaneously, the primary income balance deficit worsened by 290 million euros, “due to a lower allocation of European Union funds in the form of subsidies (-289 million euros),” as explained by the BdP (Banco de Portugal).
Meanwhile, the services balance surplus increased by 715 million euros, justified by the evolution in the balance of technical services related to travel and tourism (291 million euros) and trade and other services provided by enterprises (199 million euros).
The financial balance thus had, by April, a total of 1.487 billion euros.
According to the regulator, non-monetary financial institutions, excluding insurance companies and pension funds, were the sector that most contributed to this balance, particularly through the reduction of liabilities in equity and debt securities held by non-residents.
Conversely, the central bank was the sector with the largest reduction in net foreign assets, due to an increase in liabilities in deposits respectively.
