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Portugal is one of the euro economies that will spend less against the crisis, despite having a deficit again this year and next. Mário Centeno opened his bags in the face of the emergence of the covid-19 pandemic, with a budget deficit that increased to more than 6% of GDP, according to forecasts by the European Commission published this week. But that is only part of the story.
If we deflate this deficit in the political transition measures and the effects of the recessionary economic cycle, Portugal is one of the six euro countries that will give the economy the least budgetary boost (see table). The question is technical, it has to do with the structural balance (which measures the adjusted budget balance for the economic cycle and without extraordinary effects), but the reading is simple. If the structural deficit increases, as it will, it means that the finance minister’s policy is being expansionist; if you retire, it is restrictive. And what you see in the figures published this week in Brussels is that, although there is a stimulus, it is lower than most countries of the single currency.
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