The state treasury will close 2023 with another three billion euros

The National Institute of Statistics (INE) has calculated and concluded that Portugal reached the end of 2023 with a surplus of 3,193.5 million euros, the largest in the history of democracy. A sum that paid for all the drugs in public hospitals for a year, and still had enough left to calm the spirits of disgruntled public servants such as teachers.

According to INE, this figure reflects growth in revenues (9%) – mainly income from taxes and contributions – higher than growth in expenses (5.2%). Increasing employment numbers and a marked increase in tourism revenue, which again broke records in 2023, help explain the surplus, which amounts to 1.2% of gross domestic product (GDP).

More than three billion euros covered the cost of all medicines in public hospitals (1.959 million euros), increased the number of teachers (300 million euros) and guaranteed a risk subsidy for PSP agents and GNR soldiers (154 million euros). , as well as the construction of Hospital de Todos os Santos in Lisbon (380 million euros).

“The result has improved the sustainability of the social security system and reduced public debt to 99.1%, below the threshold of 100% of GDP,” the Ministry of Finance said in a statement.

Reducing the debt and balancing the budget “strengthens our defense in the face of international instability and uncertainty,” Fernando Medina said.

“More employees mean not only an increase in para-fiscal revenues for social security, but also an increase in GDP and, as a consequence, an increase in tax revenues,” says Paulo Rosa, an economist at Banco Carregosa, also recalling the “resilience of the tourism sector.”

AND
Account balance
“The ability to respond to the difficulties associated with the pandemic and the inflation crisis confirms that it is essential for Portugal to maintain policies that ensure fiscal balance and reduce public debt,” Finance Minister Fernando Medina said this Monday.

Changed ratio
According to data published this Monday by the regulator, the public debt ratio amounted to 99.1% of GDP in 2023, four tenths more than what was expected at the beginning of April by the Bank of Portugal (BdP). This is a decrease of 13.3 percentage points (pp) compared to 2022. In February, according to preliminary estimates, the forecast was 98.7%.

Families with 17% national debt
Portugal’s household-owned public debt increased again in 2023, reaching 17%, while foreign investors lowered their weight despite continuing to be the group with the largest overhang, according to the Bank of Portugal. The data shows that families held 17% of the country’s total government debt at the end of last year, increasing their weight largely through savings certificates.