The governor of the Bank of Portugal, Mário Centeno, believes that this year’s budget deficit will not exceed 0.4% of the Gross Domestic Product (GDP), thus falling below the government’s target of 0.9%, after the results of 2022.
In an interview with the Lusa news agency, Mário Centeno highlighted this Wednesday that the portuguese economy has surprisedparticularly last year, both in nominal and real terms.
“I don’t see any reason for the budget balance to deteriorate,” he said, when asked if the starting point of a deficit of 0.4% of GDP in 2022, despite the impact of 1.4 billion euros in spending support to mitigate energy costs for companies to move to this year, will allow a deficit below the 0.9% forecast for 2023.
The Government will deliver the 2023-2027 Stability Program until April 15, in which it will be able to update the macroeconomic forecasts.
Mário Centeno highlighted that there was a very significant recovery in activity in Portugal in real terms last year, and pointed out that forecasts point to this year. real growth of 1.8%if expectations regarding international pressures such as war, inflation and stability are maintained.
“We have an economy that is growing and that has a level of activity above its potential level,” he said.
The head of the Bank of Portugal (BdP) pointed out “that the employment is at historically high levels“, “the unemployment rate that is significantly below the natural level of unemployment in historically defined places, from a statistical point of view” and “wages are increasing”.
“All the figures we have from Social Security show a very significant growth in wages declared to Social Security,” he stressed.
The Bank of Portugal (BdP) improved, last week, the growth forecast for the Portuguese economy this year to 1.8%, growing by 2% in 2024 and 2025.
Source: Observadora
