Finance minister describes “credibility gain”
Fernando Medina, Portugal’s finance minister told a function in Madeira last night that the government’s performance in 2022 has allowed Portugal to be removed from the “isolated position” of the third most-indebted country in Europe.
It is, he maintains, “a credibility gain”.
“The effort we made during 2022 will allow us to ensure that Portugal is no longer in this position of third on the podium of the most indebted countries”, he said.
Instead “Portugal is part of a platoon where Spain, France and Belgium are, in that order” – meaning the country is now effectively 4th in the list of Europe’s most-indebted countries.
Notwithstanding the significant challenges looming, Mr Medina stressed: “This year we will have the biggest reduction in the weight of public debt”.
Indeed, in his eyes, it is the biggest reduction on record: “We will always hear critics devaluing this fact, saying that it was the economy, that it was inflation. It is true. All this helps. But the truth is also this: if we had decided to spend all the money, the debt would have remained as it is” (he means was).
Says Lusa: “The socialist leader considered that the reduction of public debt is one of the aspects that benefit the country in the current international situation, also highlighting the geographical location as a factor of attractiveness and development, as well as the high employment rate and political and social stability.
“Portugal had, at the beginning of 2022, a public debt of 125% of GDP”, said Medina, adding that only Greece and Italy had higher debts.
“The fundamental issue is that we will no longer be in an isolated position. We will be perfectly integrated within the averages of countries with economies much larger than Portugal’s.”
Mr Medina also said that the Socialist government’s priorities for 2023 are based on support for family income and job protection, increased investment and balanced public finances.
“Our goal for 2023 is to have a primary balance of 1.6% of output. That is, Portugal will now have a surplus in its budget accounts if we exclude the amount of interest we have to pay”. This will reduce public debt to 110% of output, says Lusa.
“Our goal is to reach 2026 with a debt below 100% of output,” Mr Medina concluded.
Source material: LUSA