Mário Centeno amended upwards the deficit target for next year. Comparing to the 1.4% on the Stability Pact, the goal has been toned down in four decimals, according to ECO.
As soon as 2017 begins, the government has as a new goal for deficit: according to ECO, the target for the fiscal deficit set by the minister of Finance in the 2017 State Budget is 1.8% GDP. The draft of the document will be handed in Parliament today.
This means the goal has been toned down based on what was inscribed in the Stability Pact that pointed to 1.4% of GDP. However, one must consider the starting point does not correspond exactly to what was expected: instead of 2.2%, the deficit will likely be of 2.5% in 2016, according to Portuguese newspaper Público.
If in 2016 the deficit is indeed of 2.5%, the new goal of 1.8% means a reduction of 1.300 million euros in deficit. There will have to be a greater effort in achieving fiscal consolidation to allow some measures that will increase expenditure – for example, an increase in pensions – or reduce expenditure – erasing the phasing out of the surcharge.