Deficit 2021 slightly below 4.3% of GDP
Portugal’s finance ministry is confident that Portugal’s public finances are on the right track.
With just two weeks to go before the end of the year, the Finance minister, João Leão, said that the country’s budget deficit for 2021 should be “slightly below” the 4.3% of GDP target defined by the State Budget for 2022 (which was rejected by Parliament precipitating a caretaker government and snap elections for the end of January, 2022).
In an Intervew with Reuters on Thursday, the minister said that the Portuguese economy did not appear to be affected by the new wave of the Coronavirus pandemic.
The 4.3% of GDP foreseen in the SB2022 had already represented a reduction on the 4.5% set out in the Stability Programme, although the original goal of the SB2021 had been 4.3% after a deficit of 5.8% of GDP in 2020 which resulted in additional costs for the State.
The projected figures for 2021 (4.3%), reflected in the State Budget 2022, is down to greater tax and social security revenues and a stronger labour market than expected.
After a historic contraction of 8.4% in 2020, the Government remains confident in a GDP growth of 4.8% this year, in line with the Bank of Portugal, which updated its forecasts today.
“Portugal is clearly in a recovery phase and the economy does not seem to have been affected by the new wave of the pandemic (Omicron). We are confident that we will grow by around 4.8% this year”, said João Leão. The ratio of public debt should end the year at 126.9% of GDP, which is very important in terms of giving confidence and credibility to investors,” concluded the Portuguese Finance minister.