Tax hikes, along with cuts in public expenditure have been mooted in a study assessing the ‘enormity’ of debt accumulated through the pandemic.
Explain reports, the economy ministry’s office of strategy and studies can’t see any other way to get out of the financial fix that Portugal is hurtling towards.
This is despite repeated assurances by PM António Costa that policies of austerity cannot be the way forwards.
The study also concluded that government support measures should be “specially focused on sectors facing international competition”. The idea here is that they will be “less dependent on the national market where elevated debt will condition the evolution of domestic demand”.
As regards tourism, the authors of the study are starkly clear: “Any support of the sector should be oriented to segments where growth is sustainable (for example luxury, ecological or health tourism) as these will be least affected by any increase in travel prices”.
The more ‘old fashioned’ mass-tourism market, as well as the market for business conferences and congresses, is expected to suffer “substantial reduction in coming times”.
The study suggests that the automobile, forestry, agriculture and lumber sectors are those that will recover ‘most quickly’.
Finally, the study points to a debt on the way of 134% of GDP – slightly less than the 136% suggested by the OECD.