The Portuguese economy financed the external sector with 2.4% of GDP in the year ending in the second quarter of 2025, according to a Banco de Portugal (BdP) document released today concerning financial national accounts and inter-sector connections, marking a decrease from the previously announced 2.6% three months ago.
Households, the financial sector, and public administrations displayed financing capabilities of 4.4%, 1.3%, and 0.7% of GDP respectively, whereas non-financial corporations were the only non-resident sector requiring funding, amounting to 3.9% of GDP.
Households had the highest financing capability, providing funds to all other sectors, particularly the financial sector.
Net household financing to the financial sector equaled 1.6% of GDP, largely contributed by increases in deposits and investments in insurance schemes and equities, partly offset by increased loans, mainly for housing purposes.
The financial sector, in turn, provided net financing to the rest of the world and non-financial firms.
Net financing to the rest of the world equaled 2.6% of GDP, reflecting foreign debt securities purchases (9.6% of GDP), partially counterbalanced by increased non-resident deposits in resident banks (7.0% of GDP).
Public administrations financed the financial sector and foreign areas by 1.5% and 1.0% of GDP, respectively, with the former variation attributed to reduced public debt securities in bank portfolios and increased deposits in these institutions, and the latter from increased placements with non-residents.
Public administration financing by households represented 0.3% of GDP, largely due to interest in savings certificates.
The rest of the world financed non-financial companies by 2.1% of GDP in net terms, highlighted by investments in corporate equity (2.5% of GDP) and corporate-issued debt securities (1.5% of GDP). The central bank notes these effects were partially offset by corporate investments in non-resident entity shares and other equity (1.2% of GDP).
The BdP further analyzed the 15-year evolution of the financial sector, noting a reduction in consolidated financial assets and liabilities as a percentage of GDP due to economic growth over this period.
“The financial sector, acting as an economic intermediary, has reported near-zero net financial assets,” the BdP statement notes.
The BdP reports that, at the end of the second quarter, the external sector remained the primary counterpart to the financial sector, increasing its share to 43% of the total stock.
Meanwhile, non-financial corporations, though less significant than by the end of June 2010, “were the second-largest sector by stock share (25%).”
On the liabilities side, the share of financing obtained from households, non-financial corporations, and public administrations increased, while external dependency declined.
According to the BdP, by the end of the second quarter this year, households were the principal financers of the financial sector, representing 40% of the total stock of its liabilities.
