“In terms of the average growth in net expenditure, Portugal has respected the reference path that was provided to Portugal, of an average annual increase of 4.5 percent, and therefore, in general, [the plan] is in line with the requirements” of the EU’s new economic governance framework, Valdis Dombrovskis, executive vice-president of the commission told Lusa news agency and other international media in Brussels.
On the day he presented the commission’s assessment of Portugal’s medium-term plan, on the sidelines of the European Parliament’s plenary session in the French city of Strasbourg, he emphasised: “It’s worth pointing out that Portugal does indeed have a very strong budgetary position.”
Thus, “over the period of the plan [2025-2028], Portugal’s budget should maintain a surplus, which is certainly an indication of a solid budgetary situation and, correspondingly, the debt-to-GDP ratio should fall considerably,” emphasised the commissioner with responsibility for the portfolio ‘An economy that works for people’ in the EU executive.
“From that point of view, we see that things are on the right track,” Dombrovskis told Lusa at a news conference ahead of his presentation as part of the autumn package of the European Semester.
The European Commission on Tuesday released its assessment of the first medium-term budget plan with targets for spending and investment and reforms, sent by the government in Lisbon to Brussels in mid-October under the new EU budget rules.
In the document, the government states that the medium-term budgetary commitments represent, on average, a growth in net expenditure of 3.6% or less over the 2025-2028 period – a percentage that coincides with the reference path indicated by the commission to the Portuguese authorities.
In this plan, the government estimates economic growth of 2.1% in 2025, 2.2% in 2026, 1.7% in 2027 and 1.8% in 2028.
The four-year budget path (2025-2028) also projects a 12.7 percentage point drop in public debt to 83.2% of gross domestic product in 2028, an average reduction of 3.2 percentage points per year.
Since the end of April, the EU has had new rules in place for public deficit and debt (while maintaining the respective ceilings of 3% and 60% of GDP), given the reform of the bloc’s budgetary rules that member states will start applying in 2025 after drawing up national plans.
In its autumn economic forecasts, published last week in Brussels, the European Commission projected economic growth in Portugal of 1.7% this year and 1.9% in 2025 – somewhat lower than the 1.8% and 2.1% respectively estimated by Portugal’s government.
The commission also projected a public debt of 95.7% of GDP at the end of this year, falling to 92.9% of GDP in 2025 and to 90.5% in 2026.
Also in an interview with Lusa, published last week, the European commissioner for the economy, Paolo Gentiloni, said that he was “closely monitoring” the growth of budget spending in Portugal, when warnings arise about possible impacts on the sustainability of public accounts, but highlighted the “good budgetary behaviour” after the previous crisis.
