Portugal posts 1.2% of GDP surplus in the first half of 2024
According to the National Statistics Institute, in comparison with the same period of 2023, there was an increase of 11.4% in revenue and 7.5% in expenses.
What?
The Public Administration sector recorded a surplus of 1.2% of the Gross Domestic Product (GDP) in the first half of this year, the National Statistics Institute (INE) announced this Monday.
“In the 1st half of 2024 as a whole, the general government balance was 1.2% of GDP, which compares with 1.1% in the 1st half of 2023”, indicated INE.
As INE explained, “taking into account the 1st semester of 2023 and 2024, there was an improvement in the balance in national accounting, although the balance in public accounting (monthly inputs and money outflows) has deteriorated”.
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In comparison with “the same period of the previous year, there was an increase of 11.4% in revenue and 7.5% in expenses”.
In terms of expenditure, there was a “growth of 8.2% in current expenditure, due to the increase in charges for social benefits (9.5%), personnel expenses (7.6%), and interest charges ( 3.0%), intermediate consumption (3.8%) and other current expenditure (29.4%), with subsidies paid decreasing 22.8% after having increased significantly in the previous quarter”.
In terms of revenue, all components increased: taxes on income and assets, on production and imports, social contributions, sales and other current revenues grew by 16.2%, 8.0%, 10.0%, 8.2% and 39 .4%, respectively.
The INE also released this week the second notification of the Excessive Deficit Procedure, which indicates that the forecast for 2024 is a surplus of 0.3% of GDP.
Family savings rate rises to 9.8% in the 2nd quarter
The household savings rate increased by 0.6 percentage points in the second quarter compared to the previous quarter, to 9.8% of disposable income.
“This performance was a consequence of the 2.2% increase in the RDB [gross disposable income] (2.4% in the previous quarter), higher than the 1.4% growth in private consumption”, indicates INE, remembering that this is a variation in nominal terms, so that the evolution of private consumption is "marked by price growth".
If calculated in real terms, that is, discounting the effect of inflation, “private consumption increased by 0.7% in the year ending in the 2nd quarter of 2024”.
The 9.7% increase in savings boosted families' financing capacity, which stood at 3.4% of GDP in the 2nd quarter of 2024.
Public debt ratio revised downwards
Public debt would have fallen to 97.9% of GDP in 2023, a revision from the 99.1% calculated in April.
INE used “the new 2021 base of the Portuguese National Accounts”, as well as more data that have since become available, allowing us to conclude that "the gross debt of the public administration will have decreased to 97.9% of GDP in 2023 (111, 2% in the previous year)”, according to the second notification of the Excessive Deficit Procedure.
Previously, the public debt ratio for 2023 had been calculated at 99.1% of GDP, according to the first notification.
As explained by the Bank of Portugal, which also publishes this data, “in 2023, public debt from the perspective of Maastricht decreased by 9.5 billion euros, to 261.8 billion euros”, and “the public debt data now published incorporate a downward revision of the series of 1.2 billion euros in 2023”.