Public Finance Council gives thumbs up to economy
Portugal’s Public Finance Council has said that the country’s deficit is being brought under control and the nation’s finances are on the right path.
However, the spending watchdog has warned of inherent dangers from banks Novo Banco, BPP and salary increases in both health and education.
Specific mention has been made of expenses relating to the recapitalisation of Novo Banco, the uncertainty surrounding the recovery of BP guarantee, but also spending commitments associated with the health and education sectors.
“The Public Administration deficit was €434 million between January and March 2018, the equivalent of 0.9% of Portugal’s GDP for the quarter, of which 0.1% reflects in part the impact of extraordinary expenditure with compensation payouts from the 2017 forest fires,” according to the CFP (Public Finance Council) on budgetary developments to the end of the first quarter of the year.
Excluding the recapitalisation of Caixa Geral de Depósitos, “The budget deficit registered a like-for-like reduction of €471 million,” it states.
According to the report published yesterday (Thursday), the public administration registered a budgetary surplus of €1.2 million, corresponding to 2.7% of GDP, which gives the best result in a first quarter in the last three years.
“This favourable development in the primary balance in the first quarter is a positive sign of meeting the targets set by the government.”
The body, headed by economist Teodora Cardoso, stated that in the case of Novo Banco, “a budgetary impact of €792 million was taken into account for the Stability Programme forecast for 2018.”