The prime minister António Costa has announced on Monday that the government is working with an inflation benchmark in 2022 of 7.4%.
Portugal’s prime minister has said that the government is working with an inflation benchmark in 2022 of 7.4% but rejected an increase in public administration salaries of the same proportion.
António Costa was interviewed by journalists Pedro Santos Guerreiro and José Alberto de Carvalho on TVI and CNN Portugal simultaneously on Monday evening.
When asked if the salary increases in public administration in 2023 would have inflation as a reference, António Costa rejected the idea, stating that the final figure will be decided within the scope of collective bargaining with the social partners.
“There will certainly not be a 7.4% increase,” assured the leader of the executive.
Costa conceded that the benchmark for the increases will be 2%, in line with what the European Union takes as ideal so as not to provoke an inflationary spiral, but they will also take into account “productivity and the goal of increasing the weight of wages in the product”.
“It is always very difficult to find the point of balance,” so that wages can increase in a proportion that is not in itself generating inflation and consequently a loss of purchasing power, he said.
Asked if the government would lower the personal income tax (IRS) in the next state budget, Costa referred this information to the presentation of the document – indicating that it would be done on 10 October, the date set out in the law – and said that this year there had already been a reduction in this tax with the splitting of tax brackets, which was even more significant for families with children and for young people at the beginning of their careers.
In the interview, the prime minister calculated that the government’s tax revenue for this year is €2.8 billion more than what was foreseen in the state budget, which is much lower than what has been claimed by the opposition.
“I can’t compare this year’s revenue with last year’s, I have to compare the revenue I’m getting with the revenue I predicted in the state budget approved in July and for which I have already committed expenditure. The difference that we have estimated gives a balance of €2.8 billion,” he justified, stressing that only in the recent family support package the State used €2.4 billion.
António Costa stressed that, before that, the government had already “returned considerably more” in consumer support and pointed out that the state also “pays inflation”.
“In fuel and food paid for by the State we have more €596 million of expenditure. The cars of the PSP police force, the GNR national guard, the INEM emergency rescue vehicles run on the same diesel and petrol”, he stressed.