Despite the 4% ceiling set by Brussels for this year, Portugal’s deficit is continuing to grow and is now unlikely to finish the year at less than 4.8% of GDP.
The over €8.3 billion hole was explained during a press conference this week as having not been helped by loans to Lisbon and Porto’s transport networks, Carris and STCP, and losses through BPN Credit. But the bottom line is that there will be no further austerity measures – at least not this year – and new accounting rules are being formulated in Brussels to iron out the wrinkles.
According to financial journalists, “the government guarantees that the (deficit) slip is due to extraordinary operations that will not be taken into account by Brussels. This will mean it can complete the 4% ceiling agreed with the troika”.
Writing in Correio da Manhã’s economy section, Pedro Gonçalves explains that finance chiefs had hoped they would be able to reduce the country’s deficit by €1.5 billion this year.
The truth is that the deficit has increased by €20.6 million.
But the good news is that the new accounting rules mean that public debt is likely to close the year at 127.8% of GDP – well below the 130.9% set by the government’s last amending budget.
