Portugal Government Budget

Portugal recorded a Government Budget deficit equal to 4.90 percent of the country's Gross Domestic Product in 2013. Government Budget in Portugal is reported by the Eurostat. Government Budget in Portugal averaged -4.63 Percent of GDP from 1995 until 2013, reaching an all time high of -2.80 Percent of GDP in 1999 and a record low of -10.20 Percent of GDP in 2009. Government Budget is an itemized accounting of the payments received by government (taxes and other fees) and the payments made by government (purchases and transfer payments). A budget deficit occurs when an government spends more money than it takes in. The opposite of a budget deficit is a budget surplus. This page provides - Portugal Government Budget - actual values, historical data, forecast, chart, statistics, economic calendar and news. 2014-04-24

Actual Previous Highest Lowest Forecast Dates Unit Frequency
-4.90 -6.40 -2.80 -10.20 -5.80 | 2013/12 1995 - 2013 Percent of GDP Yearly


Portugal Government Budget

Government Last Previous Highest Lowest Forecast Unit
Government Budget Value -622.00 2014-02-28 -219.00 271.00 -14745.00 -2123.75 2014-02-28 EUR Million [+]
Government Spending 7817.10 2013-11-15 7726.90 9004.70 5945.40 7747.54 2014-03-31 EUR Million [+]
Government Debt To GDP 129.00 2013-12-31 124.10 129.00 48.50 133.71 2014-06-30 Percent [+]
Credit Rating 39.89 [+]
Government Budget -4.90 2013-12-31 -6.40 -2.80 -10.20 -5.80 2013-12-31 Percent of GDP [+]

Further Budget Deficit Reduction Can be Achieved in Portugal

Since reaching an agreement on the bailout plan in May of 2011, Portugal has embraced a series of austerity measures and structural reforms aimed at bringing public finances into a sustainability path. So far, the overall budget deficit was reduced almost by half, reaching 6.4 percent of GDP at the end of 2012. Yet, Portugal has to cut an additional €5.3 billion in public spending over the next three years. This can be achieved by implementing necessary reforms like reduction of public wages, pensions and local governments cost.

One of biggest fixed costs in the public sector are salaries

At the end of 2012 there were 583.669 public workers costing around 16 billion euros, more than 20 percent of the public administration expenses. It is evident that for the country of 10.6 million people of which only 4.7 million actually work, the public sector employment is way too big. In order to reduce the burden it is necessary for all branches of government (central, regional and local) to make an assessment of the human resources needs in terms of qualifications, technical skills and experience. For example, at the end of 2011, Portugal had almost 33 thousand primary school, 124 thousand secondary and 37 thousand university teachers. The ratio of students per teacher was 10.9 for primary education, 13.8 for secondary and 15.5 for tertiary; while the same ratios for the OECD average were 15.8, 7.5 and 14.4 respectively. In this case, it would make more sense to increase the number of primary teachers and dismiss both secondary and university teachers. According to our estimate, this measure would reduce the total cost by 13 percent and move more resources to the much needed areas.

Pension system is running out of control

In the last thirty years, the cost of pensions almost doubled from 3 percent of GDP in 1990 to 5.6 percent in 2011. Two main factors behind this increase are the decline in the birth rate and the aging of the population. In fact, some measures like penalties for early retirement and bonuses for late retirement and the equalization of benefits between men and women and between public and private workers were already introduced. Yet, deeper reforms are needed including further increase in the retirement age. More importantly, current pay-as-you-go social security scheme should be transformed to a fully funded one. 

Local governments cost too much

The public budget for 2013 allocates 2.12 billion Euro to the local governments. This 1.15 percent of overall expenses could be reduced. In fact, the government already approved legislation to close more than one thousand civil districts. However, as 37 percent of municipalities have less than 10 thousand habitants; more consolidations could be easily implemented. This would reduce the number of salaries paid to city mayors and councilors and help to better allocate existing resources for example for maintenance and waste management.

Duarte Ricardo | duarte.ricardo@tradingeconomics.com
5/17/2013 6:10:48 PM

Government Budget | Notes
A government budget is a legal document that forecasts the government expenditures and revenues for a specific period of time. The period covered by a budget is usually a year, known as a financial or fiscal year, which may or may not correspond with the calendar year. A government budget is often passed by the legislature, and approved by the chief executive or president.


Portugal Inflation Rate Down to 4-1/2-Year Low  
Portugal’ annual inflation rate dropped to -0.37 percent in March of 2014, down from -0.08 percent in the previous month and 0.45 percent a year earlier. It is the lowest level since November of 2009.
Portuguese Trade Deficit Widens in February Over a Year Earlier  
The trade deficit increased to EUR 795.0 million in February of 2014, from EUR 744.4 million a year earlier, as exports increased by 4.7 percent and imports rose by 5.0 percent. Compared with January of 2014, the gap decreased from a revised EUR 956.0 million.
Portugal Inflation Rate in Negative Territory  
Portuguese annual inflation rate declined 0.1 percent in February of 2014, down from 0.1 percent in the previous month. Monthly inflation was recorded at -0.3 percent changing from -1.4 percent in January and -0.1 in February of 2013.
Portugal Trade Deficit Widens in January on Rising Imports  
Portuguese trade deficit widened to € 925 million in January of 2014, from a revised € 888 million deficit in December and a € 599 million gap a year earlier. Imports from countries outside the EU surged as bad weather conditions in December affected the normal working schedule of the port terminals.
Portuguese GDP Advanced More than Expected in Q4  
The Portuguese economy expanded a revised 0.6 percent in the last quarter of 2013, up from the previous quarter's 0.3 percent growth. The final figure comes better than a 0.5 percent expansion previously reported, boosted by investment and exports.
Portuguese Economy Rebounds in Q4 2013  
In the last quarter of 2013, Portugal’s GDP advanced 0.5 percent over the previous quarter, accelerating from a 0.3 percent expansion in the previous three-month period, flash estimates showed.
Portuguese Inflation Rate Slows in January  
In January of 2014, Portuguese annual inflation rate slowed to 0.1 percent from 0.2 percent in the last month of 2013. On a monthly basis, prices fell sharply by 1.4 percent, the lowest rate in almost 38 years, due to lower cost of clothing and flights.
Portugal Posts the Lowest Trade Deficit in 17 Years  
In 2013, Portugal’s trade deficit shrank 15 percent over the previous year to € 9.28 billion, the lowest deficit since 1996. The coverage rate reached 83.6 percent, corresponding to a 3.0 p.p. increase over a year earlier.
Portuguese Unemployment Falls for 3rd Straight Quarter  
In the fourth quarter of 2013, Portugal’s jobless rate decreased for the third straight quarter to 15.3, from 15.6 percent in the previous three-month period. A year earlier, unemployment reached 16.9 percent.
Portuguese Inflation Rate Rises 0.2% in December  
In December of 2013, Portuguese annual inflation rate turned positive and rose 0.2 percent, after falling 0.2 percent in the previous two months, due to higher prices of health, food and alcoholic beverages.


South Korean Economy Expands at a Fastest Pace  
In the first quarter of 2014, South Korea’s GDP accelerated for the fourth straight quarter to an annual 3.9 percent growth rate, driven by exports.
South Korea GDP Growth Beats Expectations in Q1  
South Korean GDP expanded a seasonally adjusted 0.9 percent on quarter in the first three months of 2014, the same rate recorded in the previous quarter and above market expectations.
Reserve Bank of New Zealand Increases Interest Rate to 3.0%  
At its April 23rd, 2014 meeting, the Reserve Bank of New Zealand lifted the benchmark interest rate for the second straight meeting by 25 bps to 3.0 percent, as inflationary pressures were increasing and were expected to continue doing so over the next two years.
US New Home Sales Fall Sharply in March  
Sales of new single-family houses dropped 14.5 percent in March of 2014 to their lowest level in eight months. Sales were recorded at a seasonally adjusted annual rate of 384,000, below the revised February rate of 449,000.
US Markit Manufacturing PMI Steady in April  
At 55.4 in April, the Markit Flash U.S. Manufacturing PMI was down fractionally from 55.5 in March, but still well above the neutral 50.0 value. Sharper rates of output and new business growth boosted the Manufacturing PMI during April, while the main negative influence on the headline index was a rise in the suppliers’ delivery times component.
Bank of Thailand Leaves Interest Rate Unchanged  
At its April 23rd, 2014 meeting, the Monetary Policy Committee left the benchmark interest rate on hold at 2.0 percent. Policymakers expect 2014 growth to be lower than previous assessed due to prolonged political unrest.
South Africa Inflation Rate Back to 6%  
South African annual consumer prices accelerated for the fourth straight month in March of 2014 to a six-month high 6 percent. On a monthly basis, prices advanced 1.3 percent, the fastest pace in five years.
Singapore Inflation Rate Edges Up in March  
Annual consumer prices rose 1.2 percent in March of 2014, up from a 0.4 percent increase in February, mainly due to a smaller fall in car prices. Contributions from all other major categories, except accommodation, were also slightly higher.
Australia Inflation Rate Accelerates Further in Q1  
Australian annual consumer prices advanced 2.9 percent in the first three months of 2014, up from 2.7 percent in the previous quarter, but below market forecasts. The rise was driven by seasonal increases in cost of healthcare, transport and school fees, and by a large hike in tobacco duties.
Mexico Unemployment Rate Up to 4.8% in March  
Mexican unadjusted jobless rate rose to 4.8 percent in March of 2014, up from 4.65 percent in February and 4.51 percent a year earlier. Upon seasonal adjustment, the unemployment rate rose to its highest in more than one year to 5.25 percent.

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