CFP points to 1.1% deficit in 2023

The Council of Public Finances (CFP), an independent public spending watchdog led by Nazaré da Costa Cabral, foresees a debt and deficit higher than government forecasts.

The CFP states in a State Budget 2023 analysis report that the annual public deficit will be 1.1% of GDP, a figure two percentage points higher than the percentage forecast by the Minister of Finance, Fernando Medina. (0.9%) (IMF – 0.7%)
It also predicts that Portugals accumulated public debt will be 111% of GDP, also slightly above the government’s forecast of 110.8%. (€138.2Bn)
However, the council also thinks that the government’s objectives can be achieved if it makes cuts in investment.
“The exercise on projections based on the macroeconomic scenario and policy measures foreseen in the State Budget for 2023 point to a deficit of 1.1% of GDP and a debt ratio of 1.1% of GDP and a debt ratio of 111% of GDP.
“Moreover, this projection would result in 0.4% percentage points for each of the indicators, if the financial assumptions from the Ministry of Finance for the reduction of “other capital expenses” are taken into account.
The CFP questions these expenses, pointing out that a reduction of €1.746 million in “other capital expenses” is foreseen, “even through the policy measures specified by the Ministry of Finances do not justify such an expressive decrease”.
The Ministry of Finance foresees a real growth of 1.3% and inflation of 4% and the CFP has validated these forecasts.