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. 2014-04-19

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 -219.00 2014-01-31 -7788.00 271.00 -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 124.10 2012-12-31 108.20 124.10 48.50 128.72 2013-12-31 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.


Chile Leaves Monetary Policy Unchanged  
At its April 17th, 2014 meeting, Central Bank of Chile left the benchmark interest rate on hold at 4 percent, following last month's cut, citing low output and demand, but hinted possible future rate cuts, depending on domestic and external conditions.
Russia Unemployment Drops in March  
Russian jobless rate fell for the first time in four months to 5.4 percent, after remaining stable at 5.6 percent in the previous two months.
Canada Inflation Rises Above Forecasts in March  
The annual consumer prices in Canada accelerated to 1.5 percent in March of 2014 following a 1.1 increase in the previous month, as energy prices surged.
US Jobless Claims Rise Slightly  
In the week ending April 12, the advance figure for seasonally adjusted initial claims was 304,000, an increase of 2,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 300,000 to 302,000. There were no special factors impacting this week's initial claims.
Brazil Unemployment Rate Down to 5%  
In March of 2014, Brazil’s jobless rate fell by 0.1 percentage point to 5 percent, below market forecasts. A year earlier, unemployment reached 5.7 percent.
Dutch Unemployment Rate Falls for the First Time in 2014  
In March of 2014, Netherlands’ seasonally adjusted jobless rate fell to 8.7 percent from 8.8 percent in the previous month and 8.1 percent a year earlier, as more people left permanently the labor market rather than found jobs.
Singaporean Trade Surplus Narrows Sharply in March  
The trade surplus decreased 51.1 percent in March of 2014 over a year earlier and 47.2 percent from February to SGD 2.3 billion. Imports rose at a faster pace than exports, as sales of pharmaceuticals and electronics fell, while shipments of petrochemicals and re-exports contributed to overall increase.
Mozambique Leaves Lending Rate Steady at 8.25%  
At its April 16th, 2014 meeting, Bank of Mozambique left its benchmark interest rate unchanged at 8.25 percent for the sixth consecutive meeting, saying this was consistent with meeting domestic economic targets for 2014.
Spanish Trade Deficit Narrows to 4-Month Low  
In February of 2014, Spanish trade gap decreased to € 1.62 billion, down from € 2.82 billion in the previous month. Compared with the same month a year earlier, the trade deficit widened 37 percent.
Angolan Inflation Rate Down To 7.32% in March  
The annual consumer prices in Angola decelerated for the second consecutive month to 7.32 percent in March of 2014, from 7.48 percent recorded in February of 2014.

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