“Don’t overspend” advises European Commission

The European Commission has advised that Portugal should meet European Council recommendations to draw up an “economical” budget.

The advice is part of a raft of comments in a document published on Tuesday which is part of its autumn statement package.
“The Commission invites Belgium, Portugal, Austria, Lithuania, Germany, Estonia, Luxembourg, the Netherlands, Slovenia and Slovakia to take the necessary measures regarding their respective budget processes to ensure that their budgets for 2023 will be fully in line with the Council’s recommendations”, states the document.
In the specific case of Portugal, the recommendations are: “to take measures to ensure a prudent budgetary policy in 2023, in particular limiting the growth of current primary expenditure credit below the medium term potential output growth, taking into account the continued temporary support for families and companies that are more vulnerable to inflated energy prices, as well as people fleeing Ukraine.”
The European Commissioner Paolo Gentiloni explained that this was “a message of caution” to the Portuguese government given its support provided to families and companies because of the acute energy crisis.
European Commission forecasts published at the start of the month suggested that Portugal’s GDP would grow 6.6% in 2022, but there would be a severe slowdown to 0.7% in 2023.
The Commission’s forecast for 2023 are more pessimistic than those of the Portuguese government which has calculated growth of 1.3%.