Now government has more room to manoeuvre, says minister.
Portugal closed 2024 with a budget surplus of 0.7% of Gross Domestic Product (GDP) in national accounts – above the 0.4% estimated by the government – according to data released by national statistics institute INE.
INE’s quarterly national accounts read: “The positive balance of the General Government (GG) sector, as a percentage of GDP, stood at 0.7% in the year ending in the 4th quarter of 2024, the same as in the previous quarter (1.2% in 2023).”
This quarterly evolution was due to an increase in expenditure (0.9%) identical to the increase in revenue (0.9%). In terms of state revenue, current revenue rose by 1.3%, which ‘reflects increases in all its components, with the exception of taxes on income and wealth (-2.2%)’, due to the application of new withholding tax tables”.
In spite of this unexpected surplus, the government still maintains the forecast of a budget balance of 0.% for this year.
Some media outlets shower praise on finance minister Joaquim Miranda Sarmento, saying he did ‘brilliantly’ to achieve this result. Now, outgoing, like the rest of the AD government, and preparing for the election campaign, he has admitted to being ‘pleased’: “I think these are good results for the country”, he told a press conference, saying he puts the surplus down to the economy having developed ‘more’ than projected.
“We have good news from the point of view of budget execution, there is a robust surplus that allows us to continue to reduce public debt consistently,” he told his audience.
The ratio of public debt to Gross Domestic Product (GDP) stood at 94.9% in 2024 – the lowest figure since 2009 (87.6%) and below the State Budget (SB) forecast of 95.9%.
According to Miranda Sarmento, this means there is now “room to propose new measures (in the AD electoral programme) that weren’t possible a year ago.”
Quizzed about current military tensions in the world, the outgoing minister said Portugal could benefit from the relaxation of budgetary rules to increase spending on Defence, but this commitment “must not jeopardise the budgetary balance and the government’s goal of maintaining surpluses of around 0.3% or 0.2% of GDP.” ND
Source material: ZAP/ Lusa
