The government budget surplus fell again in May, after declining in April, from EUR 962 million to EUR 722 million, a reduction of EUR 240 million, mainly due to support to families, intended to mitigate the inflationary crisis, and by the additional salary increase of the prosecutor’s office, according to a statement from the Ministry of Finance released this Friday.
While the impact of the measures related to the Covid-19 pandemic has diminished, “the impact on expenditure of the income-increasing measures announced at the end of March and April, namely the public administration pay increase (update of 1% of the the pay tables and an increase in the meal allowance by 15.4% and the support measures aimed at families”, the guardianship clarifies in the same note.
It should be recalled that Finance Minister Fernando Medina has already warned that “the second quarter accounts will be significantly worse” compared to the first quarter, which registered a surplus of 1.2%, according to INE, as a result of of the impact of the government’s measures, for an amount of 2.4 billion euros.
“The acceleration of expenditures will tend to continue in the coming months, reflecting the globality of the measures, as well as the reflection of inflation in public procurement,” the guardian emphasizes in the communiqué sent to the editors, that supports Medina’s statements.
Although this decrease in the surplus in May corresponds to an improvement of EUR 1,046 million compared to the same period last year, it is due to a slowdown in revenues, which increased by 7.7% to May, compared to 9.5% %. % to April, and on the other hand, an acceleration in spending, from 4.8% to May, compared to 3.6% in April.
On the revenue side, which reflects the positive dynamics in the labor market, emphasis should be placed on the slowdown in tax revenues, which rose by 8.1% until May, compared to 10% in the previous month, and on social contributions , which rose 11.6% compared to 11.9% in April.
Excluding exceptional support (Covid-19 and geopolitical shock mitigation measures), effective expenditures rose 8.2% year-on-year (6.9% in April), while primary expenditures (excluding interest) rose 8.9% year-on-year (8 .7%). % in April) and 21% compared to the same period in 2019.
“The increase in government spending is due to wages, the acquisition of goods and services, investments and social benefits,” the guardianship emphasizes.
Personnel costs increased by 7.5% to May 2023 (compared to 6.4% to April), year-on-year, due to cross-cutting salary updates for public administration employees, the impact of the increase in the monthly guaranteed minimum and the increase in the meal allowance. In this context, the contribution of SNS (+11.4%) and PSP and GNR (+8.7%) salaries stands out.
Expenditure on the purchase of goods and services increased by 5.7% year-on-year, which is mainly due to the observed evolution in higher education (+27.1%), defense (+15.4%) and local government (+12.4%).
Excluding the measures related to the Covid-19 pandemic, expenditure on the acquisition of goods and services by government increased by 16.1% up to May (+22.5% compared to the pre-pandemic period).
Expenditure on investments in Central Administration and Social Security increased by 9.8% excluding PPP, strongly influenced by the increase in investment in the Metropolitano de Lisboa extension and in the railway, which in both cases more than doubled compared to the same period last year.
ANDxExcluding Covid-19 measures and pensions, social benefits increased by 14% compared to the same period last year, largely due to the update of the social support index of wage increases, as well as the impact of legislative changes. This performance was strongly influenced by family grants for children and youth (+30.0%), social benefits for inclusion (+25.4%), parental benefits (+10.7%).
Pensions recorded an increase of 6%, more than the regular update which fluctuated between 3.89% and 4.83% for this period, and which still does not reflect the 3.57% interim increase already announced for the month July.
In May 2023, the stock backlog amounted to 634 million euros, 10% less than in May 2022 (-70 million euros). In this context, the very sharp contraction of the EPE hospitals is striking, whose stock decreased by 32.4% (or minus 152 million euros).
Source: DN
