Social benefits eat up €1.1Bn of €7.2Bn budget surplus

 In Economy, GDP, News

Portugal’s budget surplus shrank by €1.062Bn to €6.215Bn because of the impact of expenditure on social benefits according to the Ministry of Finances in its budget statement for the first 10 months of the year in which period the surplus reached €7.277Bn.

“On the expenditure side, there was an increase in social security payments, personnel expenses, and on the acquisition of goods and services” according to the ministry.
In October, there was an increase in effective expenditure of 4.9%, which jumped to 7.5% if adjusted to the effects of Covid-19 measures, and the impact from the geopolitical shock, which was strongly influenced by “measures to boost incomes, social benefit payments, as well as by the reflex from inflation on public contracts.”
The impact of measures associated with the geopolitical shock rose to €2.257Bn to September. Of this amount, €927 million are measures related to, for example, the “extraordinary financial support for the most vulnerable families, including support for children and young people, and support for farming.”
Despite the surplus falling back in October compared to September, it was still a fairly positive result of €6.215Bn, well above the like-for-like amount posted in 2022. At that time, the budget was less than €2.721Bn, or €3.494Bn less.
The overall surplus bonanza was achieved largely on the back of increased IRS revenues that rose 15.1%, but also down to national insurance contributions that put an extra 11% in social security coffers. This phenomena, according to the ministry reflects the “resilience of the labour market”.