LISBON, April 4 (Reuters) – The danger of default on mortgages in Portugal is low regardless of the steep rise in rates of interest by the European Central Financial institution (ECB) as a result of there are such a lot of folks in work, ECB Governing Council member Mario Centeno mentioned on Wednesday.
In Portugal, round 90% of the inventory of 1.4 million mortgages has variable charges listed to three-month, six-month and 12-month Euribor charges.
Centeno, who’s governor of the Financial institution of Portugal, mentioned that, opposite to what occurred within the sovereign debt disaster that led to the nation’s worldwide bailout in 2011, “this time the Portuguese financial system was ready to face a disaster like this”.
“The danger of default (on mortgages) is low as a result of Portugal has by no means in its historical past had so many individuals working and the nation prior to now has had increased rates of interest, increased mortgage funds and extra indebted households than it at the moment has,” he advised a parliamentary committee.
Portugal’s month-to-month unemployment price fell to six.8% in February from a revised studying of seven.0% in January.
Centeno mentioned that in 2022, 190,000 new jobs had been created with whole employment reaching a document excessive of round 3.98 million, whereas wages per employee elevated by 7.6%, which in contrast with annual inflation of seven.8%.
“Regardless of inflation, there was solely a marginal drop of 0.2% in the true wage per employee and the true disposable revenue of Portuguese households didn’t fall as a result of authorities’s help measures,” he mentioned.
Centeno mentioned there have been 450,000 extra folks employed than in January 2019 and the common wage had elevated by greater than 200 euros to 1,319 euros ($1,444) per 30 days.
The share of dangerous loans in Portuguese banks’ mortgage portfolios fell to an all-time low of three% in December, the central financial institution mentioned on Thursday.
The ECB final raised its refinancing price by 50 foundation factors to three.50% three weeks in the past.
($1 = 0.9136 euros)
Reporting by Sergio Goncalves
Modifying by Mark Potter
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