Portugal waiting for a new realistic OE
Managing a country in the post-pandemic and in the midst of war with safe ammunition and weapons in Europe at the moment. And it requires speed. Yesterday it was good news to learn that the government should present a proposal for the 2022 State Budget already for a week and not at the end of the month, quickly ending the management of the nation in twelfths. With strictness in the calendar, maybe in May the country can have OE.
The Government Program being discussed in the Assembly of the Republic, yesterday and today, will certainly need adjustments. The opposition had already accused the same of being totally disconnected from the present and some seemingly inevitable touches. The new measures, as far as we know, were in the drawer to be announced today.
For now, from the Government, and from which the document of the State Budget for 22 emanates, to be based on four pillars: the issue of emergency, the commitment to the transition to the digital programme, the fight against the dem crisis and the fight against inequality2. They are all very noble causes, but they are not enough.
It will be necessary to respond to the current situation of armed conflict and present the entire State Budget file that is more pragmatic. Augusto Santos, the new president of the Assembly of the Republic Silva, who gives his first interview to DN and TSF, recalls “in the past, the Budget also did not foresee a pandemic” and arrangements were made.
Today, given the past invasion of Ukraine, it is not worth insisting on Parliament on a document closed during the previous legislature, because some predictions are valid throughout the previous legislature.
Inflation forecasting is one of the uncertainty variables. The upward trend has been accentuating (5.3% in March, in Portugal, the highest value in 28 years) and the income policy has been reassessed by the Portuguese. The rise in the rate of inflation outweighs the rise in prices and purchasing power literally evaporates. With the available data, it is possible to decide from the minimum wage who has earned (even if little) to be able to purchase.
The Socialist Executive must give signals to the citizens and leave written the intention to take care of the difficulties of the families.
Speaking of money, in the current situation there is no longer any incentive for the economy. In fact, having money deposited in the bank does not pay off as it is synonymous with losing value. Interest applied to time deposits is almost zero and will still disappear because of the damn inflation. With no incentive to save, savers are left to invest in the capital market, but this involves a risk.
Even knowing that the Government’s Program “is not for the immediate” but “with a wider horizon”, as the future President of the Republic has already underlined, it is also certain that the war will have an impact on Portugal throughout the 15th legislature, if not is right for longer. As the people say, “those who go to sea fly on land” and “it is better to be safe than sorry”.
