Portugal records a deficit of 0.2% in the first quarter of 2024
The Government still plans to achieve a surplus of 0.3% by the end of 2024.
In Parliament this week, the PM Luís Montenegro said that the budget deficit of 0.2% "is the sole responsibility of the previous government”
However, he reassured the Portuguese, promising to keep the accounts balanced and even positive at the end of the year.
But he pointed out that the PS and Chega also have a responsibility in this matter, since they have approved measures in defiance of the government and the parties that support it, such as the end of tolls on ex-SCUTs or the extension of the reduced VAT rate (6 per cent) on electricity.
Deficit in the first three months
This first quarter deficit contrasts with the progression a year ago, when the State had a surplus above 1% of national wealth. Revenue increased, but not as much as the expenditure.
“Looking at the quarterly values and not the year ending in the quarter, the Public Administration balance in the first quarter of 2024 amounted to -118.9 million euros, equivalent to -0.2% of GDP, compared to 1.1% in the same period last year. Compared to the same period of the previous year, there was an increase of 7.3% in revenues and 11.0% in expenditures,” said the National Institute of Statistics.
The institute says that the balance of the Portuguese economy rose to 3.2% of GDP in the first quarter of 2024 (2.7% in the previous quarter).
There was an 11.1% growth in recurrent expenditures.
Pensions hike
According to the data, the increase in expenditure is mainly based on the increased value of pensions.
Pensions rose, at the beginning of the year, between 5% and 6%, with the impact to be expected on the deficit accounts. The increase in expenditure is also result of higher employee expenses (9.6%), interest fees (9.7%), intermediate consumption (4.1%), support (103.4%), and other current expenses (6.7%).
Despite the State's accounts being in the red in the first three months of this year, the expectation is that 2024 will end with a surplus.
The Minister of Finance, Joaquim Miranda Sarmento, has previously said that Portugal will have a slight budget surplus this year and in 2025. In recent comments to reporters, he said that the government’s estimates are still, this year and next, “a budget surplus of about 0.2%.” -0.3% of GDP (gross domestic product)”, which is “what was initially expected in the 2024 budget”.