Finance Minister admits budget surplus in 2019

  • ECO News
  • 28 February 2020

The first surplus in democracy may have arrived a year earlier. Centeno admits that it is already possible to have a surplus given the behaviour of the economy in the fourth quarter "was very strong".

The Finance Minister Mario Centeno revealed on Friday that Portugal may have posted its first budget surplus sooner than forecast, given the behaviour of the economy in the fourth quarter “was very strong”. The government was expecting a 0.2% deficit for 2019 and a surplus just in 2020.

“It is possible (to have a surplus already in 2019). In the fourth quarter, the economy performed very, very well. There was a rebound in exports, investment also kept the momentum very high, the labour market keeps delivering great results,” said the Finance Minister in an interview with Reuters.

The economy is benefiting from “a very sharp drop in interest payments, with very sharp savings on interest payments, a much better than expected labour market, and we are performing almost 100% of what was budgeted for, not spending more, but not spending less,” stressed Mário Centeno.

These statements by Mário Centeno comes on the same day that INE revised upwards the evolution of the economy in 2019. Instead of 2%, Portugal’s GDP grew by 2.2%. Both the Government and the International Monetary Fund (IMF), the Public Finance Council (CFP) and the Organisation for Economic Co-operation and Development (OECD) anticipated economic growth of 1.9%.

According to new data from INE, GDP grew 0.7% in the fourth quarter, a one-tenth upward revision from the flash estimate.