Brussels warns government over PPPs and public guarantees

Both national and international institutions have identified risks for the Portuguese ministry of Finance in meeting the State Budget for 2023 and of the macroeconomic backdrop that is subjacent to it over government-backed credit lines and PPPs

The credit lines with public guarantees, the requests to reset the financial balance of Public-Private Partnerships (PPP) and pressures on public expenditure could compromise the government’s targets. The European Commission has also warned about the effects of the drought.
Starting with economic growth, the Commission has revised this upwards to 6.6% in 2022, but has cut its estimate for 2023 by almost a half to 0.7%.
Forecasts for next year are more pessimistic than the government’s, which anticipates growth of 1.3% in 2023, and 6.5% for this year.
Regarding public finances, the Commission forecasts a public debt of 115.9% this year and 109.1% next, almost in line with the State Budget’s forecast (115% in 2022 and 110.8% in 2023), and a downwards trajectory to 105.3% in 2023.
Other pressures on the budget for next year and going forward include rising pressures on current expenditure, particularly from public salaries and those from inflation and demographic