The Portuguese Technical Unit for Budget Support (UTAO) shows the deficit goal set by the Portuguese Government for 2017 is within reach.
Mário Centeno is thriving in his compliance with the 2017 deficit goal. In the first six months of the year, the Finance minister has already cut the deficit twice as much as he needed to for the entire year. The numbers come from an analysis from UTAO (Portuguese Technical Unit for Budget Support) sent to deputies this Tuesday.
ECO had access to the document, which stated: “UTAO’s estimate points to a 2,115 million euros deficit until August, which represents a 1,413 million euros’ improvement in comparison to the same period of the previous year”. Experts conclude: “When making a comparison with the forecast for the 2017 State Budget, mentioned above, the homologous improvement estimated until August surpasses in 80.9% the improvement foreseen for the entire year (which is 781 million)”.
How much has the deficit decreased?
In other words, this means that if the fiscal consolidation rhythm were to remain the same on the second half of the year as it was until June, the Government would more than comply with the 1.5% of GDP goal set for the 2017 deficit. ECO estimated the Finance minister has a 980 million euros’ margin.
However, the Finance ministry has warned against some effects in the second quarter of this year that will condition Portugal’s ability to continue consolidating the accounts: the payment of Christmas subsidy to civil servants and the fact that there will not be a positive impact from the income from PERES (fiscal amnesty programme) or European Union’s prepaid margins. In addition, there is still the possible negative effect of CGD’s recapitalization that could add 2.1 percentage points to the 2017 result.