"There is a transition from the effort made in the pandemic period, in terms of debt and expenditure that, in our opinion, has two to three years to be realised," said Mário Centeno.
The governor of the Bank of Portugal (BoP), Mário Centeno, said on Friday that the general government has “two to three years” to correct the effort made during the Covid-19 pandemic in terms of debt and expenditure.
“There is a transition from the effort made in the pandemic period, in terms of debt and expenditure that, in our opinion, has two to three years to be realised,” Mário Centeno told reporters this Friday at the press conference to present the December Economic Bulletin.
The governor considered that this implies “the resumption of a sustainable debt trajectory”, dropping to 2019 levels by 2024, noting that this reduction in public debt is an “almost ‘sine qua non’ condition for Portuguese public debt to remain sustainable”.
“For this to happen, it involves a reduction in the weight of permanent expenditure in GDP compared to what was the need to respond during the pandemic period,” in which there was a reduction in output and an increase in permanent expenditure, according to Centeno.
Mário Centeno also mentioned the need to “resume the reduction of the structural tax burden, which between 2015 and 2020, according to the Bank of Portugal’s results, reduced by 1.2 percentage points.”
“This trajectory should be resumed in the coming years,” he noted.