Today, the Portuguese Parliament is debating the Stability Program (PE) 2023-2027, which was presented publicly by the government at the start of last week and for which Chega and BE have proposed resolutions of rejection.
The debate is scheduled to begin at 3:00 p.m. and is expected to last approximately two hours, with the government receiving 30 minutes.
In the document, the executive includes an upward revision of the growth forecast for the Portuguese economy this year to 1.8% (compared to 1.3% forecast in October in the State Budget proposal for 2023), of the inflation rate to 5.1% (when it previously pointed to 4%), and a downward revision of the budget deficit forecast to 0.4% this year, below the 0.9% in the State Budget for 2023.
As for the public debt ratio, it is projected to decline to 107.5% this year and fall below 100% by 2025, while the unemployment rate is projected to increase to 6.7% from 5.5%.
The government has announced that pensioners will receive an interim increase of 3.57 percent beginning in July of this year and a correction to the pension base in 2024, in accordance with the law’s updating formula.
Among the policy measures proposed by the European Parliament is a reduction in the individual income tax (IIT), which is estimated to save 2 billion Euros over the projection horizon.
The EP 2023-2027 was met with criticism from various opposition parties, which the Ministry of Finance team led by Fernando Medina is expected to hear again today during the document’s debate.
After the 2023-2027 PE was released, the PSD criticized the lack of ambition in the economic growth forecasts and welcomed the government’s admission that it had reduced pensions.
Chega announced on Friday that it has submitted “a motion to reject the Stability Program,” requesting that it be discussed today along with the Government’s proposal, with André Ventura noting that the rejection “is just a sign that this is not the right path from an economic and fiscal policy standpoint for the Government to follow.
Rui Rocha, president of the Liberal Initiative, deemed the growth forecast for the Portuguese economy for this year to be “very inadequate” and recalled that “a very significant portion” of this growth is attributable to the Recovery and Resilience Plan (RRP).
The EP also drew criticism from the left of the PS, with the PCP arguing that the document aims to “satisfy Brussels and the interests of economic groups” and the leader of the communist parliamentary group, Paula Santos, stating that the revaluation of pensions is “only about complying with the law.”
The Left Bloc, for its part, announced on Sunday that it would introduce a resolution for the Protection of Income Against Inflation and Rejection of the Stability Program in the parliament. Catarina Martins had previously characterized the program as “true irresponsibility” and one that “any right-wing party” would propose, accusing the executive of “living in an absurd country”
Considering that the Government “either miscalculated” or “didn’t want” to give the 3.57% increase at the beginning of the year, the Free party defended the pension increase beginning only in July as “particularly incomprehensible.”
The PAN spokesperson accused the government of having a “excessive obsession with the deficit” and “little sensitivity” to the context of structural inflation, calling for greater tax relief for families and businesses.
LT (AAT/SMA/FM/TZS/ARL/VCP/JPS/JSD)
