Finance Minister Joaquim Miranda Sarmento assured this Wednesday that the government’s goal is to “maintain a budget surplus of around 0.2% or 0.3% of GDP” over the next four years.
At a hearing of the Committee on Budget, Finance and Public Administration, Miranda Sarmento acknowledged that “Portugal has a relatively positive budget structure”, stressing that “the figures to date indicate that Portugal will comply with the new budgetary rules” of the European Union.
This is because “the expected spending trajectory is in line with what the European Commission considers the critical point of the new governance, and Portugal’s debt sustainability analysis is in line, with debt falling by at least one percentage point per year.”
The minister also said that “very soon, in two weeks, technical negotiations will begin” between the financial services and the European Commission on the medium-term budget plan.
According to the government, the assessment of “the evolution of expenditure and balance allows us to have greater confidence that Portugal will present and will not encounter any difficulties in the discussion and adoption of the programme by the Commission.”
Looking to the legislative horizon, he concluded that “over the next four years, the goal is to maintain a budget surplus of around 0.2% and 0.3% of GDP and thus control public spending and maintain the European Commission’s parameters.”
“The figures allow us to take into account the normal dynamics of government spending, the renewal of wages, the impact of inflation on purchases, as well as the growth of net primary expenditure in accordance” with the rules.
Miranda Sarmento also made it clear that the government is still finalizing the macroeconomic and budgetary scenario, but the figures “indicate that either in 2024 or 2025” there will be “growth above 2%.”
However, there is “a lot of information to feed into the model and it will not be until October” when the OE 2025 proposal is presented that the government will have “more reliable value” for the forecasts.