The governor of the Banco de Portugal, Mário Centeno, believes that the budget deficit will not exceed 0.4% of gross domestic product (GDP) this year, putting it below the government’s target after the 2022 results of 0.9% remains.
In an interview with the Lusa agency this Wednesday, Mário Centeno stressed that the Portuguese economy has been surprising, especially in the past year, both in nominal and real terms.
“I see no reason why the budget balance should deteriorate”he said, when asked whether the starting point of a deficit of 0.4% of GDP in 2022 will carry over to this year, despite the €1,400 million impact on aid expenditures to reduce energy costs for businesses, allow for a deficit below the 0.9% forecast for 2023.
The government will deliver the Stability Program 2023-2027 until April 15, in which it can update the macroeconomic forecasts.
Mário Centeno stressed that there was a very significant recovery in activity in Portugal last year in real terms, noting that forecasts point to 1.8% real growth this year if expectations for international pressures are maintained, such as war, inflation and stability is maintained.
“We have an economy that is growing and has an activity level above potential”he said.
The head of Banco de Portugal (BdP) pointed it out “that employment is at a historic high””the unemployment rate which, from a statistical point of view, is significantly lower than the natural level of unemployment in historically determined places” and “wages are rising”.
“All the numbers we have from Social Security show very significant growth in wages reported to Social Security”he stressed.
The Bank of Portugal (BdP) last week improved its growth forecast for the Portuguese economy this year to 1.8%, with growth of 2% in 2024 and 2025.
Source: DN
