Deficit shrank to 0.4% in 2022 – better than the Government had estimated

Portugal’s public deficit shrank to 0.4% in 2022 – further than the Government’s estimate of 1.5% for the year.

In 2021 the deficit had improved with a reduction of 2.9%. It means that from 2021 to 2022 the difference between the estimated reduction and the actual one was around €3.5Bn.
In the State Budget for 2023 the Government had pointed to a negative balance of 1.9%, but in December it corrected the number to 1.4%-1.5%.
Last week in parliament the Prime Minster António Costa said it could even be less than that since the National Statistics Institute had thought that €1.4Bn in measures to alleviate energy costs would have to be included in this year’s accounts.
The budget deficit of 0.4% would be around €3.5Bn below the 1.9% forecasted in the State Budget, bolstering the improvement in public accounts after a negative balance of 2.9% in 2021 and 5.8% in 2020.
In the State Budget for 2023 the Government had suggested a forecast for the deficit of 0.9%.
The Council of Public Finances updated its budgetary and economic forecasts to a deficit of 0.6% in 2023 which will progressively improve until achieving a surplus of 0.1% in 2025.
The overall public debt fell to 113.9% of GDP at the end of 2023, improving against the 125.4% for 2021. This year the Government expects a new reduction to 110.8%.

Photo Lusa (Portuguese Finance Minister Fernando Medina) – Miguel A. Lopes.