Economists consulted by Lusa predict, in national accounting (which counts in international comparisons) a surplus of between 1% and 1.5% of the Gross Domestic Product (GDP), above the 0.8% projected by the Ministry of Finance in October.
Last year’s budget execution gives strong signs that the result could be higher than expected, as the State (from a cash perspective) recorded a surplus of 4,330 million euros in 2023, a value that contrasts with the deficit of 3,437 million euros. euros in 2022, and this has been the expectation within the outgoing government.
Among the main national and international economic institutions, the Bank of Portugal predicts a surplus of 1.1%, the Public Finance Council of 1%, the European Commission of 0.8%, while the International Monetary Fund points to 0.2 %.
If forecasts come true, the 2023 surplus will surpass the 0.1% recorded in 2019, the year in which the former Minister of Finance, Mário Centeno, entered economic history as the first ruler in Terreiro do Paço to win a positive budget balance in the democratic period.
The current Minister of Finance, Fernando Medina (PS), whose successor will be announced this week with the announcement of the composition of the PSD government that will take office, thus leaves a better starting point for this year than expected.
However, the coordinator of NECEP – Católica-Lisbon Forecasting Lab, João Borges de Assunção, warns that in the State Budget for 2024 (OE2023) “very high increases in permanent expenses were included” and “there could be a more unfavorable evolution in 2024 for public accounts”, with the ongoing disinflation process “increasing nominal expenses faster than tax revenues”.
“There is also increased uncertainty about possible changes to budgetary policy with the change in Government and some specific adverse effects on expenditure in the first months of the year as a result of the electoral environment”, he says.
The director of the Competitiveness Forum’s study office, Pedro Braz Teixeira, also considers that this is “a more apparent than real advantage for 2024”, since “budgetary consolidation in recent years has been very deficient, with compression expenditure rather than reducing expenditure through reforms”.
The economist points out in particular the salary demands in the public service, the excess tax revenue that has “motivated demands for tax cuts, which will weigh on the OE24” and the under-execution of public investment, with “a strong impact on the degradation of public services” that will need to be compensated.
The national statistical body publishes today the first notification of the Excessive Deficit Procedure, which is delivered by Member States to Brussels, and in which the forecast for the current year is the responsibility of the Ministry of Finance.
The data that INE will release today also allows us to know indicators such as the family savings rate.
