The Government believes that continues to have room for the measures it wants to see included in the Budget proposal of the State for 2025 and uses Fitch’s ratingwhich revised the outlook for Portuguese debt to “positive”, as trump card.
In a statement, the office of the Minister of Finance, Joaquim Miranda Sarmento, wrote this Sunday that “Fitch highlights the continuous progress in reducing public debt, the commitment to prudent fiscal policy and the continuation of the external deleveraging process” to justify having revised “the outlook for Portuguese debt to ‘positive'”.
“As the Government has defended, it is possible to adopt measures on the revenue and expenditure side, while maintaining budget surpluses”writes the Ministry of Finance in a note sent to editorial offices.
According to the Finance Ministry, both the decision by the financial rating agency Scope and that of Fitch, announced on Friday, to improve the Republic’s Outlook “anticipate possible increases in Portugal’s rating”.
“The economic and budgetary forecasts of several international institutions are aligned with those of the Government, namely theanticipating budget surpluses for the coming years“, writes Miranda Sarmento’s office, after stressing that Fitch’s decision, in addition to highlighting the commitment to budgetary policy, “also highlights the resilience of the labor market, the increase in disposable income and investment, as factors that will contribute to economic growth”.
The Government’s statement comes days after the Public Finance Council (CFP), led by Nazaré Costa Cabral, warned that the reduction in IRS rates for young people up to 35 years old, in the new IRS Jovem proposal already sent by the Government to Parliament, should throw the public accounts back into deficit within two years.
The warning was made in the report updating the medium-term economic and budgetary projections of the Public Finance Council.
The CFP simulations pointed to a significant deterioration of the balance due to the measure that has divided the Government and the main opposition party, the PS, in the negotiations on the State Budget for 2025.
According to the organization, the IRS Jovem will add 0.3 percentage points of GDP to the budget balance over the next few years. In 2025, the result would still be to move from the perspective of a surplus of 0.4% of GDP to 0.1% of GDP, but in 2026 the public accounts would go into the red: instead of a surplus of 0.1% of GDP, the country would return to deficit, with a negative balance of 0.2% of GDP.
This Saturday, the Minister of Parliamentary Affairs assured that the Government “is available” to “negotiate and give in” on the State Budget proposal and warned that the socialists have “increased responsibilities” in this negotiation and that “there can be no childishness”.
“The Government is very willing to reach a consensus on the Budget. It is very important for us that the country has a Budgetthat the Government’s proposal be approved. We know that we do not have an absolute majority in parliament and, therefore, we are available, more than available, we are interested in talking, in negotiating and in giving in where necessary to be able to have a Budget approved”, said Pedro Duarte, in Santo Tirso, on the sidelines of a visit to that municipality in the Porto district as president of the PSD/Porto District Political Commission.
Source: www.jornaldenegocios.pt
