Costa presents positive economic outlook

The prime minister said the country is experiencing an extraordinary spike in inflation, which he says will stabilize next year.

“This is the first state budget endorsed by the Portuguese,” said the chief executive, in an allusion to the open political crisis with the failure of the previous budget proposal and the early legislative elections that followed which the PS won by an absolute majority. .

António Costa completely ruled out the possibility of the country returning to coal in response to the current energy crisis and defended the objectives contained in the government’s 2022 state budget proposal, which will be discussed in general in parliament on 28 and 29 .

Not a temporary budget

On the issue of the state budget, António Costa refused the prospect of being a proposal for six months, retorting that several of the measures will have retroactive effects from January 1, and considered it natural that the opposition forces criticize.

“We made a commitment that once elected, we would present the exact same budget, which is the original, but already incorporating all the commitments we had made in the negotiations with the PCP – and, despite this, the PCP maintained his negative vote”.

António Costa later claimed that the budget proposal “will significantly strengthen incomes, from the start of all pensioners up to 1,108 euros, which will experience an extraordinary increase” and that they will be paid retroactively from January 1.

Good forecast

Regarding the fact that the main international institutions estimate for Portugal a level of growth lower than that foreseen in the budget proposal, António Costa retorted that “the starting point” for the execution of this year’s budget “is much better than that which was planned”.

“The planned deficit was 4.3% and it was 1.9%. The starting point is frankly better. So in June we will start preparing next year’s budget,” he said.

Regarding the phenomenon of inflation, the Chief Executive cited the forecasts of the International Monetary Fund (IMF) which “reaffirm that we are currently experiencing an extraordinary peak of inflation, which is not going to continue”.

“Inflation is forecast at 4% in Portugal and for 2023 [the IMF] estimates 1.5%, a very significant drop already next year. There are other less optimistic institutions, but the European Central Bank (ECB) points to the same trajectory, understanding that we will tend to stabilize in the euro zone with inflation around 2%, “he said. affirmed.

“Despite everything, we are the third or fourth country in the European Union to have lower inflation precisely thanks to the energy policy and the measures taken in October to control the rise in prices. In the coming months, we must act very strongly on the price formation process. In this sense, I hope that this Friday the Assembly of the Republic will already approve the reduction of the Tax on Petroleum Products (ISP) by an amount equivalent to what was planned to be reduced in VAT”, a- he declared.

No return to coal

António Costa also considered essential that the proposal of Portugal and Spain, to avoid the contamination of the price of electricity by that of gas, be approved soon by the European Commission.

“But it would be absurd to go back to coal. Portugal must accelerate the energy transition,” he added.

Julio V. Miller