Finance Minister Fernando Medina said this Friday that the price shock will continue to mark everyone’s lives as inflation remains high despite a predicted drop next year.
“Inflation is one of the most difficult variables to anticipate, but it is safe to say that the price shock will continue to mark everyone’s lives”said Fernando Medina at a hearing in the Budget and Finance Committee, in parliament, as part of the discussion on the specific proposal for the state budget for 2023 (OE2023).
The finance minister noted that the latest forecasts foresee a fall in inflation in 2023, keeping it at a still high level, between 4% and 5.8%.
“Several indicators point to reductions in transport and commodity prices in international markets, which will certainly have structural consequences for the formation of price levels, with the assessment of their consequences still early”orphan.
Fernando Medina also pointed out that central banks should continue to raise interest rates.
“In the available market forecasts, they will be able to raise it [as taxas de juro] still in 2023, making them the highest value in several years. This is a challenge that calls the state, banks, households and companies into a new context of monetary policy that we will have to live in,” he stressed.
Nevertheless, the supervising minister believes, given the available data, that Portugal “it is able to once again have an economy that performs best among European economies by 2023”.
Difference is due to greater pessimism in Brussels for net external demand
The finance minister said this Friday that the differences in growth forecasts between the government and the European Commission for next year are due to a more pessimistic view of the executive on net external demand.
Fernando Medina’s point of view was conveyed during a hearing in the Budget and Finance Committee, in parliament, in the context of the discussion on the specialty of the proposed state budget for 2023, when the deputy of the liberal initiative Carla Castro asked him about the forecasts released this Friday by Brussels.
Fernando Medina explained that the 0.7 percentage point (pp) difference between the European Commission’s gross domestic product (GDP) growth forecasts, released this Friday, and the government “result of the difference in net external demand directed at the Portuguese economy”🇧🇷
The supervising minister underlined that this is the result of a “The European Commission’s most pessimistic view of the external impact” and stressed that the Portuguese government, for its part, has verified that the export sector has “held up”.
This Friday, the European Commission revised Portugal’s GDP growth slightly upwards for this year to 6.6%, but expects it to grow only 0.7% in 2023, well below its previous projections and those of Lisbon. , which expects Portuguese GDP growth of 1.3%.
Also responding to the Liberal Initiative delegate, Fernando Medina claimed that the European Commission estimates that Portugal will continue to grow into 2023 and above the Eurozone, with, he said, “a bigger gap than it already had”.
Medina also pointed out that the European Commission predicts that Portugal’s unemployment rate will remain stable, in what it classified as an “element of greatest economic and social importance for 2023”, and forecasts of reducing the weight of the national debt .
Source: DN
