The Bank of Portugal said this Friday that the measures that were recently approved put the country at risk of running budget deficits again in the coming years, according to the June economic bulletin published this Friday.
The June Economic Bulletin contains forecasts for government accounts. However, according to the Bank of Portugal, “the approval and announcement of new measures with fiscal implications a few weeks before the publication of this bulletin conditions the assessment of the situation of Portugal’s public finances in the coming years.”
The Central Bank even states that “the scale of these measures and their nature”, due to the impact of reduced revenues and/or increased spending, imply a contraction in the fiscal balance, the consequence of which is the risk of a return to the budget deficit. .
“On current information, a return to a deficit situation is expected, which would jeopardize the desired trajectory of government spending under the new European fiscal rules,” the report said.
In 2023, the fiscal balance was positive and amounted to 1.2% of gross domestic product (GDP).
Asked by reporters about a return to deficits, Centeno said the balance will only be effectively calculated after budgetary calculations, and until then other consequences such as delayed fiscal impacts and countervailing measures will have to be taken into account. this can be taken into account.
Despite this, he talked about several measures that have proven problematic from a budgetary point of view, such as tax cuts and government salary negotiations.
“If measures [de compensação] do not appear, in our assessment, there is no budgetary reserve for what is presented,” Centeno said.
The former finance minister of the PS government said economic policies should be “sensible and counter-cyclical”, including fiscal policies.