The European Commissioner for the Economy, Paolo Gentiloni, admitted on Thursday that situations of energy poverty could worsen in countries such as Portugal and Spain, as one of the consequences of prolonged droughts.
The autumn macroeconomic bulletin placed Portugal in fifth place on the list of 27, as one of the countries where there is a risk of “energy poverty”.
“The risk of drought is directly related to the prices of energy and products in general, which is why it is one of the downward risks that we have in specific countries,” said the commissioner, recalling that “that is the experience, both in Portugal and in Spain, of the impact of this situation on hydraulic energy and on the energy mix”.
Asked about the temporary nature of the measures adopted by the Government to deal with the increase in energy prices, Paolo Gentiloni admitted that the measures had a “rather high” impact in helping families and companies, but they must be seen as “temporary”.
“The package of measures adopted to mitigate this impact through a reduction in the fuel tax, a carbon tax freeze within the scope of this fuel tax, a one-time support paid in October to different groups of the population , subsidies for companies facing a growing cost related to gas, etc”, he exemplified.
“This package was quite high, reaching, in our estimate, 2.1% of GDP.” This is a substantial impact and I think it is important to address the risks of energy poverty which of course exist for a number of member states,” the commissioner said, noting that the measure must be “targeted and temporary”.
“Of course, what we always ask is that this measure be as temporary, as focused as possible,” he defended, although he acknowledged that “it is not easy, but that is our call.”
The Commissioner for the Economy was speaking in Brussels at the presentation of the autumn macroeconomic bulletin. The perspectives from Brussels already reflect the impact of the war. But, with rare exceptions, 2023 will still be a year of economic growth.
Increase
The Portuguese economy will continue to grow in the next two years, but there will be almost a brake in the background, in relation to the GDP growth of 6.6% that Brussels forecasts for this year. In 2023, the Portuguese economy is not expected to grow more than 0.7%. It is a lower estimate than the government predicted in the state budget proposal it sent to Brussels and the national parliament. Still, that’s more than double the predicted measure of growth for the group of 27, of 0.3%.
Sweden, Latvia and Germany are expected to post negative growth next year. In the case of Germany, the economy is expected to contract by 0.6%.
All this will change in 2024, and all European economies are expected to resume growth. In the case of Portugal, it should be even slightly above the average of the 27, growing by 1.7%.
Unemployment
Unemployment indicators should remain stable over the next year. Brussels calculates the unemployment rate at 5.9% in 2022 and 2023, and a slight improvement in 2024, to 5.7%.
Greece and Spain continue to lead the table, with more than 12.5% unemployed. In Germany, the contraction of the economy will also have a reflection on the level of the labor market, unemployment is expected to rise, but Brussels does not expect it to exceed 3.5% – on the contrary, it should stabilize at this level by 2024.
Inflation
The European Commission calculates that Denmark, Malta and Portugal were the most effective in containing inflation in 2022. In the case of Portugal, this year there was an average increase of 8.0% in the cost of living. Over the next two years, the price of goods and services will continue to rise, albeit at a slower rate. – 5.8% next year and 2.3% in 2024.
deficit
At this point, with the budgetary discipline rules suspended, it is a less relevant fact, from the point of view of economic governance in the European Union, but it can still be said that Brussels estimates a deficit of 1.9% this year , 1.1% in the next and 0.8% in 2024.
Debt
The debt is expected to continue falling over the next two years, from 115.9% this year to 105.3% in 2024.
Source: TSF
