The European Commission on Tuesday urged the Portuguese government to “take the necessary measures” so that the state budget for 2023 (OE2023) is “coherent” with budgetary prudence, and warned of “risks” in the deficit and debt for support to families.
“The Commission invites Portugal to take the necessary measures within the national budget process to ensure that the 2023 budget is in line with the Council recommendation”says the community manager in his communication with the global assessment of next year’s budget projects, published this Tuesday.
Taking into account the SB2023 proposal sent by Lisbon to Brussels and the Commission’s autumn forecasts, the institution intends to start next year in Portugal “that current expenditure growth financed at the national level approaches potential output growth in the medium term, assuming the planned reduction of measures in response to high energy prices, including temporary and targeted support for vulnerable households and businesses”🇧🇷
“Consequently, the growth of nationally financed primary current expenditure risks being inconsistent with the Council recommendation”notes Brussels.
The Council’s recommendation of mid-July stated that Portugal in 2023 “ensure prudent fiscal policies, in particular by limiting the growth of nationally financed primary current expenditure below potential output growth in the medium term, taking into account the continuation of temporary and targeted support to households and firms most vulnerable to rising energy and people prices flee Ukraine”🇧🇷
Already in the communication released this Tuesday, the European Commission emphasizes “believe that Portugal’s Draft Budgetary Plan risks being only partially compliant with the budgetary guidelines set out in the Council Recommendation” because although the country “has quickly implemented energy measures as part of the emergency policy response to exceptional energy price increases, an extension of existing support measures and/or adoption of new support measures in response to high energy prices would contribute to further growth of nationally financed net current expenditure and to an increase in the deficit and government debt expected for 2023″🇧🇷
“It is therefore important that Member States better target these measures to the most vulnerable households and businesses, to maintain incentives to reduce energy demand, and that they be withdrawn as pressures on energy prices ease.emphasizes Brussels.
For the community manager, Portugal too Limited progress has been made on the structural part of the fiscal recommendations […] and therefore invites the authorities to accelerate progress”🇧🇷
In mid-July, the Council recommended that Portugal proceed in 2023 “fiscal policies aimed at achieving prudent medium-term budgetary positions and ensuring credible and gradual debt reduction and medium-term fiscal sustainability through gradual consolidation, investment and reforms”🇧🇷
In mid-October, the government submitted the SB2023 proposal to the Assembly of the Republic, which envisages a growth of the Portuguese economy of 1.3% in 2023 and a budget deficit of 0.9% of gross domestic product (GDP).
Source: DN
