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Portugal posts historic budget surplus

Portugal recorded a historic budget surplus of 1.2% last year, which exceeds the Finance Ministry's official forecast of 0.8%, according to data released on Monday by Statistics Portugal (INE).

The state's financing capacity in 2023 improved to €3.19 billion, which translates into an improvement in the public accounts compared to the deficit of 0.3% of Gross Domestic Product (GDP) recorded in 2022.

Last year's surplus surpasses that of 2019 (0.1%), the year in which former Finance Minister Mário Centeno entered the country's economic history as the first government official in Terreiro do Paço to achieve a positive budget balance since 1974.

According to INE data, the development in national accounts represents an improvement of €3.973 billion between 2022 and 2023, the result of an increase in revenue (9%) that is more significant than that observed for expenditure (5.2%).

The INE data also reveals that the primary balance, corresponding to the overall balance net of interest expenditure, was positive, as in 2022, having improved by five billion euros to €8.945 billion.

Economists consulted by Lusa estimated that the budget surplus, in national accounts (the one that counts in international comparisons), would be between 1% and 1.5% of GDP.

Among the main national and international economic institutions, the Bank of Portugal predicted a surplus of 1.1%, the Public Finance Council 1%, the European Commission 0.8 %, and the International Monetary Fund (IMF) pointed to 0.2%.

The Finance Minister Fernando Medina (PS) until now, whose successor will be known this week with the announcement of the composition of the new government led by Luís Montenegro that will take office, leaves a better-than-expected starting point for this year.



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