The Finance Minister said the deficit reached around 600 million euros in March.

This Thursday, the Finance Minister estimated the deficit recorded until the end of the first quarter of this year at approximately 600 million euros and accused the previous government of increasing spending after the last legislative elections.

“The fiscal situation is much worse than what the previous government announced,” Joaquim Miranda Sarmento said at the end of the Council of Ministers meeting, saying that the 300 million euro deficit recorded in the last budget performance report in March should be added to. another 300 million euros as a result of increasing debts to suppliers.

According to the head of the finance department, part of the increase in spending occurred after the early legislative elections on March 10.

In his first speech, Presidential Minister António Leitan Amaru said that at the budgetary level, “the current executive has revealed a number of alarming situations that the duty of transparency requires that they be brought to the attention of the Portuguese.”

The Minister of State and Minister of Finance then noted that the previous socialist government believed that the public accounts “were quite good, but they were not.”

“In January there was a surplus of 1.2 billion euros, which fell to 800 million in February. Now a deficit of almost 300 million euros has been reached. If we add to this almost 300 million deficit the growth of debts to suppliers and another 300 million. period from January to March, so we see that we have a deficit of almost 600 million,” said Joaquim Miranda Sarmento.

This fiscal evolution, according to the finance minister, is the result of some measures taken after the resignation of the previous chief executive and a call for early elections. And others occurred even after the March 10 elections.

“Before March 31, the previous government used a significant part of the Ministry of Finance’s reserves [para fazer face a despesas imprevistas depois do verão], one of which was designated as temporary with 500 million euros, but now has only 260 million. The previous government also approved emergency spending in the first quarter in the amount of 1.080 million euros, 950 million of which came from the elections on March 10,” he emphasized.

Miranda Sarmento also added that the current leader is conducting an “exhaustive study” of the 108 resolutions approved by the Council of Ministers after the resignation of Antonio Costa on November 7.

“I can already commit three significant sums that were promised without budget restrictions: 100 million euros to support farmers in the fight against drought in the Algarve and Alentejo; 127 million euros for the purchase of vaccines against Covid-19; and 200 million euros for the restoration of the school park,” he added.

By March, the state moved from a surplus of 1.177 million euros to a deficit of 259 million euros, a level not seen since December 2022, according to the latest data from the Directorate General of Budget (DGO).

This dynamics was affected by a decrease in income (7.4%) and an increase in expenses (15.1%). The rebalancing is also justified by the transfer of all responsibilities of the Staff Pension Fund from Caixa Geral de Depósitos to Caixa Geral de Aposentações, amounting to €3,018.3 million. However, it should be noted that this operation was of a “financial nature” and did not have any impact on the balance of national accounts.

Adjusted for the effect inherent in the Pension Fund, the budget balance shows a decrease of EUR 2,299.1 million compared to the first quarter of 2023. In turn, the primary balance decreased by 2220.8 million euros and amounted to 1141.5 million euros.

The increase in effective primary expenses is explained by an increase in transfers (23%), personnel costs (7.8%) and purchases of goods and services (7.2%).

Excluding transfers from the Caixa Geral de Depósitos Staff Pension Fund, the 4.3% increase in income “reflects the evolution of contribution income (9.6%) and taxable and non-contributory income (10.2%).”

“The combined behavior of remaining income (27.1%) and transfers (10.1%) contributed to the increase in tax and non-deductible income.”