The Portuguese economy recorded an external surplus of €2.1 billion in the first half of the year, corresponding to 1.6% of the half-yearly GDP.

This compares to a €2.9 billion deficit in the same period. 

As per data published by the Bank of Portugal, this performance “is mainly due to the results of the second quarter of the year,” when the balance of the current and capital accounts hit €1.5 billion, said the central bank governor. 

Until March, the same balance amounted to €582.5 million, The Portugal News reports.

The fall in the goods account deficit and increases in the services and capital accounts surpluses specifically contributed to the development of the external accounts. 

Furthermore, regarding the balance of goods, there was a decline of €531 million in the deficit, with higher growth in exports over imports. Although exports of goods rose by 3.3% up to June to €1.2 billion, imports increased by 1.4% to €692 million.

In addition, the balance of services registered a rise of €3.8 billion in the surplus, with the travel and tourism balance justifying over half of the variation with a rise of €1.9 billion. The capital balance rose by €725 million, “essentially due to the greater receipt of investment aid and the greater transfer of carbon licenses,” according to the regulator.

In terms of the economy’s financing capacity, the Bank of Portugal said there was a financial account balance of €2.8 billion in the first half of the year due to the rise in external assets, which exceeded the increase in liabilities.

Moreover, external assets rose by €6.6 billion, stemming from public administration and bank investments in securities issued by non-residents, along with a rise in loans granted by businesses to non-resident entities. 

In addition, Portugal’s net external debt fell from 67.6% of GDP (€161.6 billion) at the end of last year to 61.4% (€154.7 billion) in Q2 2023. “This is the lowest ratio observed since June 2007,” said the central bank.