- It notes that, together with spending associated with the pandemic, current measures to mitigate the effects of price increases are set to have an impact on the budget balance in 2022 that is “slightly lower than [those] in 2020 and 2021” and are more concentrated in the second half of the year.
- It thus concludes that “in the favourable context for the evolution of tax revenue, even considering the budgetary impact of these policy measures estimated at around 3.2% of GDP in the second half of the year, there is sufficient margin to meet the official target”.
- The Bank of Portugal has also revised upwards its forecast for the country’s rate of consumer price inflation this year, by 1.9 percentage points, to 7.8%, which would be its highest since 1993, reflecting growing external pressure on prices.
Bank of Portugal sees scope for 2022 budget deficit to meet 1.9% target
