Portugal news - Portugal’s budget surplus exceeds forecasts by 1 billion euros for the year 2023.
Is Portugal doing well economically in 2024?
Portugal achieved a historic budget surplus of 1.2% of the Gross Domestic Product (GDP) for the year 2023, exceeding the target of 0.8% that was expected to reach 2,191 million euros.
Portugal’s financing capacity improved to reach over 3 billion euros, which reflects an improvement in public accounts compared to the 0.3% deficit registered in 2022. The State's financing capacity originated mainly from Social Security funds that totaled 5,670 million euros.
According to the national statistics office, INE, Portugal’s budget surplus of 3,194 million euros results from an increase in revenue of 9% that is higher than the expenditure of 5.2%. The 9% increase in Portugal’s total revenue between 2022 and 2023 was driven by the 8.1% increase in current revenue. There were significant increases of 10.4% in social contributions, and of 10.7% in taxes on income and wealth.
Portugal’s capital revenue increased by 68.9% compared to 2022, driven by revenue from the Recovery and Resilience Plan (PRR). The increase in capital expenditure was mainly due to the increase in gross capital formation of +17.5%, driven by the implementation of European funds relating to the PRR.
Portugal’s favorable fiscal surplus reflects not only price increases but also the growth of economic activity and the dynamic labor market.
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