Government has 800 million euros of margin for new measures

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The government estimates a budget surplus, without new measures, of 0.3% of GDP this year, thus having a budgetary margin of around 800 million euros for new proposals without jeopardizing the balance of accounts.

In the Stability Program (SP) for the period between 2024 and 2028, sent by the government to parliament today, the Ministry of Finance points to a reduction in the budget surplus from 1.2% of GDP in 2023 to 0.3% this year.

This scenario is based on invariant policies, i.e. it only takes into account measures legislated or planned by the previous government.

Based on these EP estimates, the executive is left with a budgetary margin of around 800 million euros this year for new policy measures, including the approximately 200 million euros that the reduction in personal income tax announced by the government last week is expected to cost.

The reduction in personal income tax rates on incomes up to the eighth bracket, which will amount to an overall reduction of around 1.5 billion euros (around 1.3 billion euros already included in the State Budget for 2024 and in force, plus 200 million euros from the new measure), will be announced on Friday, after the Council of Ministers.

In the no-policy-change scenario, the Ministry of Finance’s forecast for this year is a tenth above the 0.2% in the State Budget, but below the 0.8% projected in the Democratic Alliance’s electoral program.

The submission of the Stability Program this year is mainly a formality of timing, since with the new European budgetary rules the document loses the weight it once had, being replaced by the medium-term budgetary and structural plans, which must be submitted by member states to Brussels by September 20.

Brussels has thus allowed a simplified program to be submitted, since the government will start negotiating the new medium-term program with the European Commission in the summer.

Parliament will debate the Stability Program on April 24, and the Portuguese Public Finance Council (CFP) has chosen not to issue an opinion on the document because the macroeconomic scenario is based on invariant policies.

Hervé Hubert
Hervé Hubert
Hervé Hubert is a 55-year-old writer and journalist based in Porto, Portugal. Born in France, he brings a unique blend of French and Portuguese perspectives to his work. Education Hervé studied Journalism and Literature at the University of Lyon in France. After completing his studies, he gained valuable experience working with various French media outlets (Portugal France also). Career He worked for several years as a journalist in France before making the move to Portugal. In Porto, he joined the Portugal Pulse team as a staff writer. Skills Hervé specializes in storytelling, investigative journalism, and cultural commentary. He has a flair for capturing complex issues in a relatable way. Personal Life He currently resides in Porto and enjoys the city's rich culture, from Fado music to Francesinha cuisine. Hervé continues to maintain strong ties to his French heritage, often traveling back to France for family visits and cultural exploration. With his unique background and diverse skill set, Hervé Hubert adds a layered, multicultural lens to every story he covers.

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