Portugal closes 2020 with deficit of €10.3T, €9.7T more than 2019

The government closed 2020 with a deficit of 10.32 trillion euros, 9.7 trillion euros more than 2019, the Ministry of Finance announced on Wednesday.

“The increased 2020 deficit of 9.7 trillion euros is explained by the Covid-19 pandemic,” the Ministry of Finance said in the communiqué preceding the release of the Budgetary Implementation Summary by the budgetary authority (DGO).

The ministry headed by João Leão said that the worsening of the public accounts balance, as a result of the pandemic, resulted from the combined effect of a reduction in revenue (-5.6%) and an increase in expenditure (+5.3%).

“On the one hand, the adverse impact on the economy caused by the health crisis translated into a sharp reduction in tax and contribution revenue; and on the other, there was an increase in expenditure due to extraordinary support measures for families and companies,” the communiqué said, underlining that these effects “justify an additional worsening of the balance of at least 4.532 billion euros.”