“Portugal has the budgetary capacity to respond” to the Coronavirus – Siza Vieira

The OECD has revised downwards its estimates for world economic growth, but also for the euro area. Pedro Siza Vieira says it is too early to talk about a revision of the forecasts for the national economy due to the coronavirus. The Minister of Economy says the impact that companies are feeling “is moderate or reduced”, but guarantees that if necessary, the State will be available to support the recovery. The “State will take measures to support the cash flow” of companies.

In an interview on RTP3, Siza Vieira avoided anticipating negative scenarios for the Portuguese economy which, according to Government forecasts, should grow 1.9% this year. “Even now, INE has revised Portugal’s growth upwards in 2018 and 2019 [to 2.2%, in the latter case]. I think making projections [for this year’s growth] is premature”.

The minister of economy says the impact on the economy “will depend on the duration of the epidemic,” and this “will be reduced the more effective the health services are. The impact of this outbreak, which has already claimed over 3.000 victims worldwide, infecting tens of thousands of people, including two in Portugal, “will depend on the scale of this epidemic, but also on the recovery” that follows.

Siza Vieira, who met with several confederations but also representatives of various sectors of activity to analyze the impact of the coronavirus, says it is still small. “Right now, the impact that companies are feeling is moderate or reduced,” she says, pointing out that obviously the hotel and travel businesses are feeling more” the effects of the virus. “There have been a lot of travel cancellations” and, he says, these are “economic effects disconnected from the real impact of the virus”.

With the possibility of facing industry adversities, Siza Vieira guarantees that the State will be available to provide support. If there are supply disruptions to Portuguese companies, which make it impossible for them to work, reductions in orders, or even in the workforce, “then the State will take measures to support the cash flow of companies”. “The state always has cash support available. It will allow access to funds for [companies] to fulfil their obligations,” he says.

The “State has the capacity to manage this situation. We have a budgetary situation that allows the automatic stabilisers to work,” without impacting public finances, the minister of economy added. Recalling what happened in 2017, with the forest fires, Siza Vieira recalled that the State could respond to the situation, providing hundreds of millions of euros.