How much can the Government spend? Guide to understanding the budget debate in seven questions and answers
The time is long gone when, because of troikathe financial crisis or European rules, Governments were forced to keep their belts tight. Spending cuts, tax increases and adjustments to accounts repeated year after year to try to achieve the desired deficit. All of this has changed in recent years. Now it is surplus that we talk about when we look at the budget balance. Portugal is one of the good students in Europe and there is even room to spend. The limits now are European rules (net spending) and the objective of keeping accounts without a deficit (or even with a slight surplus).
In fact, neither is extraordinarily demanding. Without doing anything, Portugal fulfills both. In the scenario in invariant policies, that is, if no new measures are taken, Portugal starts with a surplus of 0.4% of GDP in 2025, according to recent projections by the Public Finance Council. A value that already includes measures approved by Parliament and also the various career increases and reviews agreed between the Government and public servants.
Not included here, for example, are the two most controversial measures that have divided Luís Montenegro and Pedro Nuno Santos: the IRS Jovem and the reduction of the IRC. Together with other measures, they can easily send accounts into deficit. Find out how far the Government can go.
