Government must accommodate an extra €2 billion in the 2022 State Budget

  • ECO News
  • 1 September 2021

In the Invariant Policies Framework delivered to Parliament, the Government identifies additional expenditure and savings for the next year's State Budget (OE2022).

The government will have to accommodate additional costs of €2,053.8 million in the 2022 State Budget (OE2022), even if it does not adopt any new measures, reports Jornal de Negócios this Wednesday, citing the Invariant Policies Framework sent to the Portuguese Parliament. This figure is the additional impact forecast for next year of measures taken in the past.

According to the newspaper, at the start of the budget process, the government has to calculate what the additional expenses and revenues will be every year compared to 2021, as a result of policy measures already in place. It is a kind of legacy of past decisions. These accounts are then a starting point for the decisions to be taken for the following year.

For 2022, António Costa’s government identifies €2,425 million of additional expenses and only €371.2 million are available to compensate for them. On the expenditure side, the highlight goes to personnel costs resulting from ongoing hiring and career promotions, as well as the automatic update of pensions. Regarding revenue, there is, for example, the additional income from personal income tax (IRS) due to the increase in the number of civil servants.