Above government expectations. The General Finance Council expects to achieve a surplus of 0.6%

in Analysis of the state’s general budget proposal for 2025known on Tuesday, the Public Finance Council wrote that “Incorporating the new information into the forecast results in a revision of the balance to 0.6 percent of GDP and the debt ratio to 92.3 percent of GDP in 2024.” – 0.2 percentage points higher than the Ministry of Finance estimates.

“The higher surplus projected by the CPP for 2024 is explained by the lower expected nominal value of public spending (mainly current primary and investment expenditures) and the higher expected nominal growth of revenues from taxes and indirect contributions, with the comparison being a percentage of GDP.” “Affected by a higher estimate of the GDP deflator than that considered by the Ministry of Finance.”Adds the entity.The expected surplus for 2025 is 0.4 percent of GDP, one percentage point higher than the government's scenario, while the debt ratio is expected to be 88.6 percent of GDP, while the executive branch expects 93.3.

The Council confirms that, “Based on the available information and the CFP forecasts presented now, the POE/2025 balance projections and the public debt-to-GDP ratio prove to be reasonable.”.

Income and expenses
Regarding public revenues, the body headed by Nazaré da Costa Cabral warns against this “Treasury projections for IRS indicate almost no flexibility on wages.”. However, it turned out “The potential for this total to be higher than expectations set forth in POE/2025, as long as the IRS delivers performance in line with bonus expectations next year.”.

In the expenditures chapter, the Council highlights that the €399 million payment related to the exceptional pension supplement that occurred in 2024 will not be repeated next year, meaning that it is acceptable that “the expected value of social benefits other than the type may be overstated.”

The measures in the budget proposal, which will begin public discussion on Wednesday, “will make an almost zero contribution to the growth of tax revenues and contributions in 2025.”.

The planned revenue raising measures for indirect taxes, in the amount of €530 million, and social contributions, amounting to €470 million, “compensate for the effect of the reduction resulting from the adoption of measures in income taxes (-€1,003 million)”.

w/Losa