The State’s accounts recorded a surplus of 0.7% for the year ending in the fourth quarter of 2024, according to data released Wednesday by the National Institute of Statistics (INE)..
“The positive balance of the Public Administration sector (AP), as a percentage of GDP, was 0.7% for the year ending in the fourth quarter of 2024, identical to the previous quarter (1.2% in 2023),” the INE statement reads.
This quarterly development is attributed to an increase in expenditure (0.9%) identical to the increase in revenue (0.9%). Highlighting state revenue, current income rose by 1.3%, “reflecting increases in all its components, except for income and property taxes (-2.2%),” due to the application of new IRS withholding tax tables.
In terms of expenditure, INE noted a 2.1% increase in current expenditure and an 11.1% decrease in capital expenditure.
The annual results concerning the AP accounts are also analyzed in the first Excessive Deficit Procedure notification, also published today, which indicates the AP had a positive balance of 1,994.2 million euros in 2024.
When determining the balance from the perspective of National Accounts, adjustments must be made to the results recorded in public accounting, which includes adjustments in items such as the payment of expenses already recorded in 2023, impacting the national accounts balance.
The relevant issues include “117 million euros associated with the conversion of deferred tax asset (DTA) of Novo Banco into refundable tax credit; the Supreme Administrative Court’s decision requiring the State to pay 227.6 million euros to EDP – Energias de Portugal as a refund of the amount paid in 2009 for the exploitation rights of the Fridão dam concession, whose construction did not occur, and additional allocation of funds to the National Electric System (SEN) to reduce electricity tariffs (200 million euros).”
This is the third budget surplus recorded in a democracy, following the 0.1% balance achieved by Mário Centeno in 2019 and 1.2% by Fernando Medina in 2023.
The surplus this year, achieved under the leadership of Joaquim Miranda Sarmento, is thus below that obtained in 2023, due to a more significant increase in expenditure (7.6%) compared to the observed revenue increase (6.3%).
Meanwhile, the primary balance, which corresponds to the global balance net of interest expenses, “was positive, as in 2023, although with a reduction of 904 million euros compared to the previous year.”
[News updated at 11:59]
