PM rules out no growth, recession scenario for 2023

  • Lusa
  • 6 October 2022

"Portugal will grow less than it did this year, but we will not have any scenario of no growth and even less of any recession," the prime minister reassured.

Portugal’s prime minister, António Costa, has ruled out a scenario “of no growth and even less of a recession” next year, and predicted that the economy will “continue to grow above the European average”.

Speaking to journalists at the end of the ceremony commemorating the 112th anniversary of the Implantation of the Republic, in Praça do Município, in Lisbon, on Wednesday, António Costa said that on Monday the government would present the draft state budget for next year, which “is a budget that is adjusted to realities.”

“”This year we are the European Union country that had the highest growth, next year [there will be] recession in many European countries, and we are not necessarily immune and, therefore, Portugal will grow less than it did this year, but we will not have any scenario of no growth and even less of any recession,” he stressed.

According to the prime minister, the economic scenario for 2023, on which the state budget will be based, is “moderate growth, adjusted to the realities of the time,” which “is based on a significant deceleration of the inflation rate and above all a fundamental concern that is key to economic policy, which is that we can maintain employment and sustain family income and the ability of companies to compete, without feeding the spiral of inflation.

“After having this year a growth rate well above 6%, which was the highest in the European Union, next year we will obviously have our growth adjusted to the evolution of the euro area. Therefore, we will not have growth of this order, nothing that looks like it, but it is a scenario where we can be confident that the country will continue to grow, will continue to grow above the European average and approach the most developed countries of the European Union,” Costa said.

The head of government also said that the finance minister, Fernando Medina, would meet on Friday “with all parties represented in the Portuguese Parliament, as provided for in the opposition statute” and “it will be first-hand to the opposition parties” that the government would present the macroeconomic scenario, refusing to give specific figures.

António Costa said that “the essentials of the budgetary measures are designed,” but the government hopes, until the close of the draft budget that it will present, “to conclude negotiations with the social partners so that the state budget for 2023 can already reflect what will be the medium-term agreement for competitiveness and incomes.”

“We are working with partners in the social conciliation to be able to close a competitiveness and income agreement that is a multi-year agreement, as we presented for public administration, which aims to ensure that on the horizon of this legislature, 2026, not only is there no loss of purchasing power but, on the horizon of the legislature, there is an improvement in purchasing power and, above all, we achieve the goal that we had proposed to increase the weight of wages in national wealth to 48% which is the European average,” he pointed out.