The General Government balance went from negative to positive in the third quarter: according to INE, Portugal achieved a surplus of 3.5% of GDP, which compares with a deficit of 4.2% in the homologous period.

According to the National Institute of Statistics (INE), the general government balance reached a positive value of 1,904.1 million euros in the third quarter of this year, which corresponds to 3.5% of GDP.

This surplus is partly explained by a transfer of capital received and recorded in the third quarter: the repayment of 1,114.2 million euros of the prepaid margin and respective application interest, which was retained when the loan was granted. European Financial Stabilization Fund to the Portuguese State, says INE. But even excluding this transfer, the final positive balance in the third quarter, although smaller, is explained both by an increase in revenue and a reduction in expenditure.

According to INE, compared to the third quarter of 2020, there was an increase of 15.9% in total revenue and a decrease in total expenditure of 1.4%.

The capital revenue from the reimbursement of the prepaid margin and the respective interest contributed essentially to the growth in revenue (which caused this item to soar by 729.1%). Thus, with the exception of sales, which decreased by 0.4%, there was an 11.2% growth in current revenue, with increases in all components. Taxes on income and wealth grew 13.1%, taxes on production and imports rose by 14.9% and social contributions increased by 6.4%.

On the expenditure side, there was a 2.2% growth in current expenditure, due to increases in social benefits (3%), personnel expenses (4.6%), intermediate consumption (8.1%) and in other current expenditure (25%).

On the other hand, interest costs decreased by 11.0%, “with subsidies recording a decrease of 39.1%, motivated by the lower weight of measures to support companies in the context of the COVID-19 pandemic compared to the same quarter of the previous year”, stresses the INE.

Capital expenditure also fell, 34.3% year-on-year, in line with an 84.8% decrease in other capital expenditure and a 26.6% increase in investment. This decline reflected “the effect of the State’s support to TAP in 2020, while the increase in investment was due, above all, to an investment made by the Local Administration”, highlights INE.

(Updated news)