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Forecasts for the Economy: “Act of Faith” or Pessimism and Inertia

Prime Minister and leader of the AD coalition (PSD/CDS), Luís Montenegro, and the secretary-general of the PS, Pedro Nuno Santos, expressed these positions during the first part of a televised debate, broadcast simultaneously by RTP, SIC, and TVI from the Carcavelos Campus of the Nova University of Lisbon.

Pedro Nuno Santos endorsed priority measures such as implementing zero VAT on essential goods and reducing the price of bottled gas, suggesting these proposals would benefit the entire Portuguese society.

Conversely, he argued that the AD program is “a sham and unrealistic,” while asserting that the PS program is “more prudent and cautious” given current forecasts.

“The current prime minister proposed something that is utterly impossible to achieve. Luís Montenegro shows two faces: one during the election campaign and then a different one to Brussels,” he accused.

According to the PS leader, the prime minister presented growth rates within the AD program that no one in Portugal forecasts, but then lower than 2% growth rates are presented in Brussels.

“What Luís Montenegro presents here is a fantasy, an act of faith,” he said, criticizing the idea of a new AD government broadly lowering corporate tax.

Luís Montenegro responded by saying that Pedro Nuno Santos aims to “create confusion, which, if not deliberate, must be sheer incompetence” concerning AD’s macroeconomic scenario.

“Pedro Nuno Santos cannot ignore that the numbers we sent to Brussels are from the perspective of so-called invariant policies, meaning they do not account for the positive effects we believe our political decisions could have in the coming years,” he argued.

The president of the PSD accused the PS of presenting a program that does not transform the functioning of the state and economy; it merely redistributes.

Luís Montenegro further warned that the PS intends to “direct the economy” by selectively supporting economic sectors and questioned which ones would be excluded.

Pedro Nuno Santos replied that the PS stance “is not radical” and aligns with what “Mario Draghi advocates in the European Union,” stressing that “no sector is left out of the support.”

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