Portuguese household debt is growing at its fastest rate since records began in 2008
Household borrowing rose 9.9% in June against the same month of 2025, the sharpest annual increase since the series started in December 2008. Mortgages account for most of it. In total, households, companies and the state owe 894 billion euros.
The headline figure is 894 billion euros. That is what general government, companies and households together owed at the end of June, up 39.6 billion since December, according to figures the Banco de Portugal released on Friday.
The number that actually matters sits further down the release. In June, household borrowing was 9.9 per cent higher than a year earlier. That is the steepest annual rise since the series began in December 2008. Portuguese families have never taken on debt this quickly in the whole recorded history of the statistic.
Where the growth comes from
Housing, mostly. Over the first half of the year household debt grew by 8.2 billion euros, of which 7.2 billion was owed to the financial sector. Within that, 5.9 billion came through mortgage lending.
The reading is straightforward. With house prices setting record after record, buyers borrow more per property, and the debt stock climbs even when transaction volumes do not. Timing helped too. For much of the year, rates were low enough to draw in the people who had been waiting. That window is closing, with the six-month Euribor at a twenty-one-month high and the twelve-month rate crossing three per cent for the first time in two years.
The state borrowed more as well
On the public side, debt rose 22.6 billion over the half-year, to 393.6 billion. Almost all of the increase came from abroad, with 15.3 billion explained by net purchases of Portuguese government paper by non-residents. Read charitably, that is foreign investors buying Portuguese debt, which is a confidence signal as much as a liability.
The private sector, companies and households combined, ended June at 500.3 billion, up 17 billion since December. Private firms contributed 8.8 billion and grew 4.2 per cent year on year, a far calmer pace than households.
As a share of the economy
Non-financial sector debt moved from 278.5 to 282.7 per cent of gross domestic product over the six months. Debt, in other words, grew faster than the economy did. The rise splits between the public sector, from 120.9 to 124.5 per cent, and the private sector, from 157.6 to 158.2.
None of this is an emergency on its own. Portugal has spent years bringing its public debt ratio down and it remains well below crisis peaks. But the household number is new, it is the highest in the entire series, and it lands exactly as the cost of money turns upward again. It is worth watching. We track rates and markets in our markets tracker.
By Beatriz Mota
Image: Béria Lima de Rodríguez / Wikimedia Commons (CC BY-SA 3.0)
