Budget balance of €2B in January

  • Lusa
  • 28 February 2023

"About 90% of the improvement in revenue is due to the good moment of the labour market", said the ministry of Finance.

Portugal recorded just over €2 billion of budget balance in January, an improvement of €184 million compared to the same month in 2022, the ministry of finance announced on Tuesday. A 6.2% increase in revenue and 5% increase in spending contributed to this result.

Primary expenditure, which excludes interest, rose 4.5% compared to January 2022. Excluding the effect of the Covid-19 measures and the geopolitical shock, primary expenditure climbed 8.2% year-on-year and 18.2% compared to 2019.

According to the same note, personnel expenditure grew, in the month in question, by 6.6%. This amount refers mainly to wages, with the remuneration update for Public Administration workers and the increase in the minimum monthly wage guaranteed.

Portugal’s health service – SNS (+13%) and the PSP and GNR police forces (+7.8%) stand out.

The purchase of goods and services rose 15.9%, “reflecting the growth of NHS and Local Government expenditure”.

In particular, the SNS had a year-on-year impact of 12.4% and 29.4% compared to 2019, including complementary means of diagnosis and therapy (9%), the component of products sold in pharmacies (8.9%) and the expenditure profile of Local Government (23%).

Without extraordinary measures, expenditure on the purchase of goods and services progressed by 19.4% in January.

“Overdue payments at EPE Hospitals recorded the lowest value ever at the start of the year (€76 million),” he added.

In January, social benefits increased by 8.3%, excluding covid measures and pensions. In the case of pensions, there was a gain of 6.8%. The growth recorded in social benefits was influenced by parental benefits (17%) and the social inclusion benefit (11.5%).

Investment in the general government rose 15.4% until January, excluding public-private partnerships.

Growth in the health sector (41.2%) and in Local Government (44.9%) stands out here.

In the first month of the year, expenditure on interest and other charges added up to 34.6%.

“About 90% of the improvement in revenue is due to the good moment of the labour market,” he highlighted.

Tax revenue increased by 10.5% in January, with personal income tax (IRS) up 14% and VAT up 11.9%.

Social security contributions added 11%.