“Soon we will be discussing budgetary surpluses, not deficits”, Centeno guarantees

  • ECO News
  • 25 March 2019

"Perhaps, for the first time in 20 years, the economic discussions will not focus on budget deficits", said the minister of Finance.

Although the final value of last year’s deficit hasn’t yet been released (National Statistics Institute is expected to share it this Tuesday), the minister of Finance, Mário Centeno, is already talking about the possibility of a budgetary surplus on public finances. “Portugal is a unique country. That uniqueness goes way beyond the deficit issue, especially given the fact that soon we will be discussing budgetary surpluses instead”, he affirmed during a conference held by the BdP and the IMF, “Portugal: Reform and Growth Within the Euro Area”.

The Finance minister talked about the Portuguese case, noting that it is a great example of a post-crisis recovery in the context of the EU.

“The combination of structural reforms and fiscal consolidation policies, together with the pursuit of inclusive economic growth, and a gradual recovery of income and social inclusion (also through the recovery of the minimum wage value) is now applauded (…) for the results it obtained “, said Centeno.

Centeno said that nowadays, young people no longer feel the need to emigrate, that the confidence of citizens – both consumers and businesses – has been reestablished and that the unemployment rate has dropped by half since it peaked during the crisis. In addition, “the country’s wealth has grown 16% in the last four years,” he continued.

“Perhaps, for the first time in 20 years, the economic discussions will not focus on budget deficits”, said the minister of Finance, adding that this economic scenario “will allow us to reach, for the first time, a budget surplus in public accounts “.

As for the prevailing perception that the country’s economy did not grow enough when compared with the neighbouring countries, Centeno wanted to prove that was not true: “Our economy has changed a lot in the last decade. For two consecutive years Portugal registered a GDP growth rate above the European average, something unheard of in the last 20 years since we joined the eurozone,” he said.

0.4%, 0.5% or 0.6%?

The final deficit figure for 2018 will be known this Tuesday, as the National Statistics Institute (INE) publishes its first Notice of the Excessive Deficit Procedure (PDE). Economists are optimistic and align with the most recent statements made by the government. This Monday, economists heard by the Portuguese news agency, Lusa,  anticipated the deficit value should stand at 0.6% of GDP.