Budget surplus of €1.85B until November

Portugal recorded a surplus of €1.855 billion until November in public accounting, worsening by €685 million compared to the previous month but improving the balance by €8.435 billion compared to the same period in 2021.

“The accumulated general government budget balance, on a public accounting basis, fell to €1.855 billion in November 2022, worsening by €685 million compared to the accumulated balance until October,” the finance ministry said in a statement released on Thursday, in anticipation of the Budget Implementation Summary of the Directorate General of the Budget (DGO).

The ministry under Fernando Medina explains that the worsening of the General Government budget balance in November compared to the previous month reflects the impact of support measures for families and businesses to mitigate the impact of rising prices but does not yet include measures decided during December.

However, compared to the period from January to November last year, strongly affected by the pandemic, the General Government balance recorded an improvement of €8.435 billion, however less expressive than in the previous month.

Compared to the same period in 2019, the improvement was €1.280 billion, the ministry said.

It explained that, compared to 2021, the improvement in the balance reflects an increase in revenue of 13.1%, higher than the increase in expenditure by 2.5%.

Excluding the effect of Covid-19 measures, primary expenditure grew by 5.9%, and primary current expenditure climbed by 7%, year-on-year. Compared to the same period in 2019, primary expenditure grew by 13.1%, while primary current expenditure increased by 11.5%.

The data provided by the ministry of finance indicates that tax and contributory revenue collected through November increased by 14.7% compared to the same period of 2021, driven by the contribution of tax revenue (17.2%).

“Compared to the pace of tax and contributory revenue recorded between January and October (15.7% compared to 2021), there is, however, a slowdown in growth,” the government explained, while the 9.4% increase in contributory revenue continued to demonstrate the resilience of the labour market.

On the other hand, until November, the measures to mitigate the impact of the geopolitical shock cost €3.85 billion, of which €1.932 billion was on the revenue side and €1.918 billion on the expenditure side.

With regard to support measures for families, in addition to the fuel tax reduction, whose impact amounts to €1.305 billion, direct support amounts to €1.875 billion.

Expenditure on the acquisition of goods and services in General Government grew by 8% year-on-year, “accelerating when compared to the accumulated figure until October (6.3%),” while expenditure by the health service (SHS) posted a year-on-year rise of 5.7%.

The ministry also said that Social Security expenditure with social benefits, excluding unemployment benefits and Covid-19 measures, grew by 7.7%, with pension expenditure growing by 7.4%.

In turn, investment by the Central Administration and Social Security, without PPP, was €1.724 billion, having increased by 30.2% compared to the same period of the previous year.

The data released by the government is from the perspective of public accounting, which differs from national accounting, released by Statistics Portugal (INE) and the one that counts for Brussels.