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Finance Minister: Portugal ‘has never been better prepared for this crisis’

Published on March 25, 2020

The Finance Minister spoke this Wednesday about the impact of the pandemic on the Portuguese economy, guaranteeing that Portugal is well-prepared for any possible crisis. Mário Centeno acknowledged that the pandemic is “paralyzing the most critical parts of the economy”, but asserts that Portugal “has never been so well prepared” for the economic impact of COVID-19.

This Wednesday, the National Statistics Institute recorded a surplus of 0.2% of GDP, estimated at 403.9 million euros, thus being the first positive budget balance in the country’s democratic history. The Finance Minister also said that the next few days will be decisive for combating the struggle involving the virus, hoping that new public and business support initiatives will go ahead. “The sudden stop in the economy will have an impact on public accounts,” he acknowledged.

Although aware of the higher expenditure in the health sector and more social support, Centeno clarified that it is still too early to “build detailed scenarios”. “In a few months it will be possible to know the real impact,” he added. The government official said that it won’t be unexpected for the budget balance in 2020 to deteriorate “by a few percentage points” of the GDP. Asked if there will be austerity measures after the pandemic, Centeno was obviously not clear in his response, but said that this crisis is not due to “macroeconomic imbalances”, it is “temporary”, and therefore, Portugal’s productive activity will resume as soon as public health conditions allow for it.

“Portugal has a solid basis for resuming activity,” he said. The State Budget for this year, which will take effect from April 1st, has “accommodating margins”, assured the finance minister.