The data released today by the National Institute of Statistics (INE) give confidence to the Government that, once again, the deficit target given for the year as a whole (4.3% of GDP) has been achieved. This will be the sixth consecutive year that the objective established in the State Budget will be fulfilled.

According to INE, the deadly deficit until September reached 2.5%, which represents a reduction of 2.6 pp compared to the deficit registered in the first three quarters of 2020.

In the third quarter of this year there was a surplus of 3.5% of GDP, which benefited from three factors: (i) an extraordinary revenue associated with the adjustment of interest on the adjustment program’s interest [Devolução da prepaid margin por parte do Fundo Europeu de Estabilização Financeira], (ii) the resumption of economic activity and (iii) the seasonal effects.

Expenditure on support to companies and families triples compared to budgeted

Fulfillment of the finalized target does not call into question the support to families and companies, on the contrary: expenditure on this support must be three times higher than expected. Measures such as the Apoiar Program helped to determine the costs of more than 40 thousand micro and small companies and the layoff supported more than 750,000 workers.

In health, expenditure is growing above 10%. That’s 1000 ME more than in 2020, a figure much higher than budgeted. There was a record increase in health professionals (14 thousand more since the beginning of the pandemic), with emphasis on the hiring of over 1400 doctors and over 4,800 nurses.

Also noteworthy is the sharp growth in public investment, which exceeded 31% up to September.

The strong economic recovery and the good performance of the labor market, with the consequent impact on the growth of tax and contributory revenue, made it possible to offset the reinforcement of the so-called support. The primary current expenditure, excluding the pandemic-related support measure, should be close to the budget.

Portugal radar forums of international concerns

The consecutive fulfillment of budget targets contributes to the credibility that the country has been gaining and is reflected in the costs of public debt, which remain at historically low levels.

Portugal is no longer on the radar of international concerns, unlike other countries like Italy or Greece, which have seen their spreads widen.

In the current context of risk of normalization of monetary policy and rising interest rates in the euro zone, this is an especially important factor for the country.

Portugal can thus face the future with confidence, but also with the sense of responsibility that is demanded by the legacy of the pandemic crisis on public finances and public debt.