Financial effort with anti-inflation package amounted to 46% of estimate

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The UTAO concluded today that the financial effort at the end of December with anti-inflation measures represented 46% of the estimate for 2023, with half of the deviation resulting from the overestimation of the impact of the temporary ISP reduction.

In the report on budgetary developments in public accounts between January and December 2023, delivered to parliament, the Technical Budget Support Unit (UTAO) recalls that the direct impact of policy measures aimed at mitigating the impact of inflation worsened the state’s overall balance by 2,224 million euros, resulting from the cumulative effect of measures that reduced revenue collection (969 million euros) and increased expenditure (1,255 million euros).

However, according to the analysis by the unit coordinated by Rui Nuno Baleiras, the financial effort calculated at the end of December with the inflation mitigation measures “represents only 46% of the estimate for the year as a whole, translating into a favorable deviation of 2,606 million euros”.

According to the experts, around half of the deviation is explained by the “overestimation of the impact of the measures to temporarily reduce the Tax on Petroleum Products (ISP), by 1,029 million euros”, and part of the remainder is also the result of the “return to the state coffers of part of the sum earmarked for the extraordinary support measure for gas (712 million euros)”.

The UTAO points out that the deviation of the ISP measure “is very close to the total deviation in indirect taxation (1,056 million euros)”.

UTAO’s analysis is based on public accounting data, which corresponds to a cash perspective, in which receipts and payments are taken into account, with the legal-institutional criterion of public entities prevailing.

This perspective differs from the national one used in international comparisons and published by the National Statistics Institute (INE), which follows the economic perspective.

Moti Shabi
Moti Shabi
Moti Shabi

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