Government forecasts for economic growth next year will follow the slowdown expected by the Bank of Portugal a few days ago in its October Economic Bulletin.
If the 2023-2027 stability program forecast that growth would reach 2% of GDP in 2024, the executive is now preparing to admit in the state budget proposal that it will amount to only 1.5%. The percentage may seem small (0.5 percentage points), but converted into euros it is no longer that much: 1,300 million. It is about half of what the government estimates to spend on National Defense this year (2,584 million euros).
The government’s forecast on this slowdown was put forward this Friday by delegates of the Liberal Initiative after a meeting with the Minister of Finance, Fernando Medina, to discuss the government’s proposal for next year’s state budget (OE2024), which the executive power will present. to parliament next Tuesday.
“We don’t spend every year here discussing the minimum wage, which is dangerously close to the average wage and ultimately makes very little difference to people’s lives.”
“What the Minister of Finance has communicated to us, without committing himself to anything – so if there are differences when the scenario is communicated it is because some adjustment has taken place between now and Tuesday – is that we will end the year in 2023 with economic growth in the region of 2.1%/2.2 and with a positive budget balance, but less than 1%,” revealed deputy João Cotrim Figueiredo.
Regarding 2024, according to the Liberal delegate, “the budget balance will be neutral, i.e. 0%, and growth around 1.5%” and this “is the same perspective as the Bank of Portugal”.
All parliamentary parties spoke to the Minister of Finance about the. And then scattered figures were released on the macro scenario that the government foresees for 2024 – but no party received the full scenario. What remained of everyone’s statements was a split between left and right: the left to the left of the PS wants the government to use a larger share of the budget surplus to combat the social emergency caused by the inflation outbreak; On the right of the PS, the main concern seems to center (as always) on a tax cut.
“If you ask me, I don’t believe we will implement any kind of structural reform.”
According to Cotrim Figueiredo, “the budgetary quantities that really interest people” are those that produce that growth that allows everyone in Portugal to earn more “and we are not here every year discussing the minimum wage, which is dangerously close to the average salary and ultimately makes very little difference in people’s lives”.
The IL delegate regretted that in 2023 Portugal “will break the sad record of more than 100 billion euros in public expenditure”, explaining that the purpose of this meeting was to understand the starting point, that is, the macroeconomic scenario , and the final arrival date. That is, the budget that will be presented on Tuesday. “I wanted to ask the Minister of Finance whether this, which is the ninth state budget of the governments of António Costa, would not once again break the record for the tax burden. I did not get an answer. And if we did, for the first time something similar to implement a structural reform, whether it concerns public services, the tax system or public administration. The minister did not want to commit to this and if you ask me my opinion, it is not the case that we are going to do that. form of structural reform”.
‘Don’t tell us that the country is not on a break because it has public debts, and everything has to go to pay off the public debts. A country that only pays government debts will at some point no longer even pay government debts. debt, because there is no money for investments, there is no money for the social emergency that we are experiencing.”
Miranda Sarmento, parliamentary leader of the PSD, explained that the government will apparently follow in the IRS what was already foreseen in the Stability Program, and therefore a “much lower decrease” than what the PSD proposes. Therefore, it seems that “the same line is maintained as the previous one, that is, maximum taxes and minimum public services” and “only in the field of housing, in fiscal matters, of reducing taxes on construction, purchase and rental of houses.” We are convinced that there is some openness on the part of the government to accept the PSD’s proposals.”
Civil service increases
On the left, Rui Tavares from Livre again pushed the idea of a pact on the use of the budget surplus. But apparently he already knows the government is unavailable. And hence the protest: “Do not tell us that the country is not on a break because it has national debts, and that everything must go to pay off the national debts. A country that only pays government debts will at some point no longer be able to pay.” pays the national debt even longer, because that is not the case. There is money for investments, there is no money for the social emergency we are facing.”
Pedro Filipe Soares, from BE, stated that “the big news is related to the existence of the government’s forecast of a surplus for the year 2023, which shows that during the year 2023 the government is not doing everything I can to to help people in such areas.” a difficult time.” And the PCP, through its parliamentary leader, Paula Santos, added: “We do not see the answers and solutions that we consider necessary to overcome all the difficulties we have already mentioned: valuing salaries, pensions, investments in healthcare, education, in the field of housing.”
Meanwhile, the government presented its proposal for increases for the public administration to the unions: 6.8% on basic salary and then a percentage that decreased to 3% at the top (this year it was 2%). The unions found the proposal “clearly insufficient” (FESAP, hits the UGT) and “miserable” (Frente Comum, affiliated with the CGTP).
Figures for 2024
820 euros. Value of the national minimum wage (SMN) next year that the government is negotiating with the social partners. It means an increase of 7.8% compared to the current 760 euros. CGTP states that the increase in the SMN should go to 910 euros.
3% to 6.8%. Increases proposed by the government for the public service, in negotiations with the unions. In the remuneration base of public administration (€ 769.20), the increase will amount to 6.8% (to € 821), from which 22% of employees will benefit.
1.5%. Expected GDP growth in 2024 (as a percentage of GDP), as shown by parties after discussion with Medina. It is a downward adjustment of growth compared to the 2% stated in the Stability Program.
3.6%. Value of inflation forecast for 2024 by the Bank of Portugal (BdP). This year this should be 4.6%. In 2022 this was 8.1%. The BdP speaks of an inflation rate of 2.1% in 2025.
0%. This could be the budget balance set for 2024: the famous ‘zero deficit’: state expenditure equals revenue. After speaking with Medina, BE even raised the possibility of posting a budget surplus.
Source: DN
