According to the report “Evolução Orçamental das Administrações Públicas em 2024,” released today by the Public Finance Council (CFP), by the end of last year, 5.457 billion euros of the Recovery and Resilience Plan’s (PRR) total 22.2 billion euros had been executed, which is equivalent to 24.6% of the total plan.
Of this amount, 4.310 billion euros were secured through European Union grants, with the remaining funds comprising loans totaling 1.147 billion euros.
The report highlights that “the most significant portion” of PRR loans (609 million euros), which had no impact on the balance, was allocated for asset financing, mainly for the capitalization of companies and financial resilience, including the capitalization of the Portuguese Development Bank.
The remaining portion of the loans (538 million euros) was used to implement projects impacting public spending and the budget balance.
The CFP’s analysis further shows that, between 2021 and 2024, of the total expenditure executed under the PRR impacting the Public Administration’s account (4.848 billion euros), nearly three-quarters were directed toward economic investment (3.524 billion euros).
Of these, more than half (2.124 billion euros) occurred indirectly through “other capital expenditure,” including support for investment projects developed by institutional sectors other than the Public Administration.
Meanwhile, public investment (FBCF) totaled 1.399 billion euros.
The organization, led by Nazaré da Costa Cabral, also notes that “almost half of the execution” during the four-year period, including financial asset financing for company capitalization and financial resilience, occurred in 2024 (2.720 billion euros), representing “a significant acceleration” compared to the previous year.
However, it adds, the execution of the PRR “fell short of expectations” in the State Budget for 2024 (OE2024), due to “significant deviations” in FBCF and primary current expenditure (execution rate of 44%; 45% if considering only the expenditure impacting the Public Administration’s account).
Conversely, the use of loans “intensified in 2024,” with the portion not dedicated to capitalization and financial resilience of companies totaling 480 million euros, 167 million more than the amount predicted in the OE2024.
“More than a quarter of the PRR expenditure executed in 2024 was funded by loans, totaling 699 million euros, the highest since 2021. Of this amount, 480 million were mainly applied to capital expenditure (85%), more than the proportion observed for grants (72%), thus contributing to worsening the budget balance by almost 0.2% of GDP,” the CFP details.
The investment expenditure of the Public Administration funded by the PRR “almost doubled” compared to 2023, boosting the growth of public FBCF, with notable investments in “Digital Transition in Education,” “Modernization of educational and vocational training institutions,” “Affordable Housing Public Park,” “Missing Links,” and “Road Accessibility.”
