The Bank of Portugal published updated balance of payments and international investment position (IIP) statistics through March 2025. Portugal recorded a current and capital account surplus of EUR 829m in the first quarter of 2025 (1.2% of quarterly GDP), EUR 1.707bn lower than in the same period of 2024, while the IIP improved to -57.5% of GDP (-EUR 166.1bn) at end-March 2025 from -58.3% at end-2024. The decline in the quarterly external surplus reflected a EUR 1.546bn widening of the goods deficit as imports (+EUR 1.674bn) outpaced exports (+EUR 128m), and a EUR 397m increase in the primary income deficit linked to lower European Union subsidy allocations (-EUR 361m). These were partly offset by a EUR 299m rise in the services surplus, mainly from travel and tourism (+EUR 160m) and technical and trade-related services (+EUR 151m). The economy’s net lending position corresponded to a financial account balance of EUR 1.215bn, with non-monetary financial institutions (excluding insurance corporations and pension funds) contributing most through reduced liabilities in equity and debt securities related to non-resident foreign direct investment, while the central bank posted the largest reduction in net external assets mainly due to higher deposit liabilities. In March 2025, the external surplus was EUR 264m, EUR 681m lower year on year, driven by a larger goods deficit (+EUR 660m) and a higher primary income deficit (+EUR 114m), partly offset by a higher capital account surplus (+EUR 202m) linked to CO2 licence sales and increased EU investment aid. The IIP change reflected a positive financial account balance (EUR 1.2bn) and positive price effects (EUR 4.2bn, including valuation gains on assets of EUR 6.3bn, notably central bank gold), offset by negative exchange-rate effects (EUR 1.8bn, mainly from US dollar depreciation) and other adjustments of -EUR 3.6bn due largely to new information; the less negative IIP-to-GDP ratio was described as the least negative since December 2002. Net external debt fell to 43.9% of GDP (EUR 126.9bn) at end-March 2025 from 44.3% at end-2024. The next update is scheduled for 18 June 2025.
Bank of Portugal 2025-05-20
Bank of Portugal reports EUR 829m external surplus in Q1 2025 and Portugal’s international investment position improves to -57.5% of GDP
The Bank of Portugal released updated Q1 2025 balance of payments and international investment position statistics, showing a current and capital account surplus of EUR 829m, down EUR 1.707bn from Q1 2024. The IIP improved to -57.5% of GDP, the least negative since December 2002, with net external debt decreasing to 43.9% of GDP. Changes were driven by a widening goods deficit, increased primary income deficit, and positive financial account balance, offset by valuation gains and exchange-rate effects.