Economy

Portugal’s parliament approves budget bill after first reading by Stocksak


© Stocksak. FILE PHOTO – Portugal’s Prime Minister Antonio Costa speaks during his attendance at the summit of European Union leaders in Brussels, Belgium on October 20, 2022. REUTERS/Piroschka van de Wouw/File Photo

LISBON (Stocksak), Portugal’s parliament approved the majority Socialist government’s 2023 budget bill in its first reading on Thursday. This opened the door to planned further deficit and debt reductions despite a sharp economic slowdown.

The bill was supported by only 120 Socialist lawmakers in the 230-seat chamber. Other parties voted against and two abstentions. However, it was enough to be approved. This contrasts to last year, when the Socialists were in minority and the rejection to the 2022 budget triggered an election.

Prime Minister Antonio Costa won the January ballot with an absolute majority.

The bill projects that economic growth will slow to 1.3% in 2023, from 6.5% this past year. Private consumption will virtually stagnate, due to high food and energy prices, and the erosion of savings gained during the pandemic.

The expected slowdown in export growth, which is 3.7%, from 18.1% this year, is due to the foreseeable recession or strong slowdown in some of its major European trading partner countries.

Public investment will increase by 37% – 8.6 billion euro with funds from European Union pandemic Relief programme.

The government plans to reduce the budget deficit to 0.9% GDP in 2020, from 1.9% in 2022. Public debt should fall to 110.8%, after a projection of 115% this year.

Premier Costa was criticised by the opposition for too much focus on the deficit. He told parliament during the debate Portugal needed to cut the budget gap, public debt and the European Central Bank’s interest rates.

He stated that the best protection for families and businesses is to not allow the yield on sovereign debt to rise to levels that affect other interest rates in our economy.

Joaquim Miranda, a lawmaker of the main opposition Social Democratic Party, stated that the budget displayed “continuity of policy that have led Portugal towards impoverishment,” accusing government of “voracity to charge taxes.”

News Source and Credit

Stocksak Editorial

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