‘Historic increase’ in pensions in 2023, says PM

Portugal’s prime minister said on Monday the government would comply with the law, and in 2023 there would be a “historic increase” in the value of pensions by the combined effect of the drastic rise in inflation and high economic growth recorded this year.

This perspective on the evolution of pensions next year was transmitted by António Costa at a CNN Portugal conference, which included a special broadcast of the programme “The Uncertainty Principle”.

Asked by journalist Carlos Andrade, the programme’s moderator, about the budgetary strategy of his executive to respond to the phenomena of rising inflation and interest rates, António Costa maintained that in the last six years, from a political point of view, it has already “become clear that the government has a conservative logic in budgetary management”.

“The government always prepares for the worst, always wishing for the best – and so far, it has turned out well. But if the interest rate rises, we know that expenditure on interest rates will surely increase,” he pointed out.

Regarding forecasts for inflation, Costa said that, as a result of this upward trajectory, next year, “the increase in pensions will be historic”.

“There is not the slightest doubt that we will comply with the formula that has existed since the 2007 reform. The laws exist to be complied with”, stressed António Costa, having former social-democratic leader Pacheco Pereira and socialist deputy and former minister Alexandra Leitão in the audience.

According to Costa, this law “means that next year there will be a historic increase in the value of pensions”.

“An increase due to the combination of registering this year an abnormally high value of growth very much by the comparative effect of last year and a historical increase also very significant of the inflation rate,” he justified.

“These two effects combined will generate a large increase in pensions next year. This is data that we know,” added the prime minister.

In this programme, he insisted on his government’s goal to conclude an agreement on competitiveness and income within the framework of social dialogue, “foreseeing, precisely, how the goal of the weight of wages in Gross Domestic Product being equal to the European average, that is, 48%, can be achieved.

Regarding salaries, namely in public administration, António Costa reaffirmed the principle that the update would be negotiated with the unions next year.

“It will consider the principle of annual updating, which will be maintained. Secondly, we are going to keep the careers unfrozen. That will happen next year. And what is the amount? That will have to be negotiated with the unions,” he insisted.