The governor of Banco de Portugal (BdP) this Monday defended the role of government bailouts and banking combined with savings in preventing defaults on family loan repayments and recommended lowering the share of government spending.
In an analysis of the current economic situation released by Banking Supervisors, Gov. Mario Centeno warns that by the end of this year, “about 70,000 families could have costs in excess of 50% on servicing a permanent home loan.” their net income”, recalling that “at the end of 2021 there were already 36,000 families.”
“Strong savings and debt reduction, as well as public support and the role of the banking sector in avoiding default, could mitigate these risks,” he said.
About a month before the state budget for 2024 (SB2024) is presented, in a publication entitled “Crossroads of Politics”, the former finance minister believes that “fiscal policy should continue to be guided by the notion that it has not changed what it was five years later.” years ago it was impossible to finance.”
While a revision of Brussels’ fiscal rules is under discussion, but the European Commission’s proposal puts more weight on the evolution of primary spending, Mario Centeno recalls that “the weight of fixed spending in the economy remains above 2019 levels”, defending that “should be reduced to ensure the sustainability of the economic cycle.”
Painting a positive picture of the country’s development since 2015, Mario Centeno argues that “the completion of the recovery from the pandemic crisis, the cooling of inflation and the need to find sources of growth in structural factors make 2023 a decisive year.”
Author: Portuguese
Source: CM Jornal
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