João Leão sees country’s deficit below 3% in 2023

  • ECO News
  • 15 April 2021

Portugal's finance minister expects the budget deficit to be below 3% of GDP in 2023.

The Portuguese government expects the budget deficit to be below 4% in 2023, the finance minister, João Leão, said on Thursday after 2021/2025 Stability Programme has been approved in the cabinet meeting.

In a press conference, João Leão revealed that “as of 2022, the deficit will decline down to 3.2%,” and that in the following years it will remain below 3%. The government’s deficit estimates for the next five years are: 4.5% (2021), 3.2% (2022), 2.2% (2023), 1.6% (2024), and 1.1% (2025).

This deficit reduction will be accompanied by economic growth. The government’s estimates pointed to an economic growth of 5.4% this year, but the current projection in the Stability Programme expects GDP growth to be lower: 4% this year and 4.9% in 2022.

In the case of public debt, as with the deficit, “a reduction is expected, year after year,” said João Leão. The public debt will be ” once again below 120% starting in 2024,” revealed the finance minister. Thus, the forecasts are: 128% (2021), 123% (2022), 121% (2023), 117% (2024) and 114% (2025).

João Leão also noted that the “big priority” right now is to support the economy and not be worried about budget control. “We don’t have to be worried right now about meeting a target of the budget rules. We should be concerned with the recovery of the economy,” he said, stressing that the country cannot, however, discard its budgetary responsibilities in order to be sustainable in the medium term.