Finance Minister João Leão assured today that the measures to support the economy and health adopted in December, due to the worsening of Covid-19 in the country, “do not change the forecast” of economic growth of 4,8% in 2021.
«Portugal managed to resist this phase of the pandemic quite well and we did not have to impose measures with a great impact on the economy and, therefore, it is expected that the value of 4,8% [growth of the Gross Domestic Product (GDP)] predicted by the Government is achieved», declared the Minister of State and Finance, speaking to Portuguese journalists in Brussels.
In statements made at the entrance to the Eurogroup meeting, the official stressed that these budget support adopted at the end of 2021 “did not change the forecast because the Portuguese economy managed to resist this phase of the pandemic very well”.
«We had to take some budgetary measures to further strengthen the SNS and more expenditure in the area of Health and, in particular, in very comprehensive Covid-19 tests in Portugal, but in relation to the prospects for economic growth we hope that the results will be reached. 4,8%", reinforced João Leão, also recalling the measures to support the economy.
Specifically, «in relation to public debt, we will have a historic reduction, from 135% to 127%, with Portugal approaching other countries», estimated the minister.
Regarding the deficit, “it will also be slightly below forecast and, for the sixth time, the Government will meet the planned budget targets, which is fundamental for the credibility and financing conditions of the country”, said João Leão.
«The indicators that we have point out that [Portugal] will be able to reach 4,8%, which is a remarkable recovery and that, adding to this year's growth, we will rise by around 11% in the space of two years», he concluded.
In the proposal for the State Budget for 2022, released last October, the Government estimated that the Portuguese economy should grow by 4,8% in 2021 and 5,5% in 2022, upward revisions compared to the forecast in the Stability Program released in April. (4,0% for this year and 4,9% for 2022).
In 2020, the first year strongly marked by the Covid-19 pandemic, the Portuguese economy contracted by 8,4%.
The public deficit is expected to stand at 4,3% of GDP in 2021 and fall to 3,2% in 2022, while the unemployment rate will fall to 6,5% next year, «reaching the lowest value since 2003», according to the proposed State Budget for 2022.
Public debt, long considered by analysts and rating agencies as the “Achilles' heel” of the Portuguese economy, is expected to fall to 126,9% of GDP this year and 122,8% next.
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