© Reuters. FILE PHOTO: Portugal’s Finance Minister Fernando Medina, speaks during an interview with Reuters in Lisbon, Portugal, November 15, 2022. REUTERS/Pedro Nunes/File Photo
By Sergio Goncalves
LISBON (Reuters) – Portugal’s public debt should drop further to 95% of gross domestic product this year if the next government remains focused on avoiding a budget deficit, the finance minister in the caretaker administration told Reuters on Monday.
The debt ratio fell to 98.7% last year from over 112% in 2022, ending below the 100% mark for the first time since 2009 as it approaches the euro zone’s average of 90.4%.
Finance Minister Fernando Medina said that balancing the budget and reducing debt “is a path that must be continued” by whichever government emerges from an upcoming snap election on March 10, and then a 95% debt ratio “is a figure achievable with relative ease during 2024”.
Medina, who is involved in preparing the Socialist Party’s electoral program, said the party’s new leader and candidate for prime minister Pedro Nuno Santos had agreed that maintaining balanced budgets “is an important line to be followed”.
The 2024 budget approved by parliament shortly before it was disbanded foresees a surplus of 0.2% of GDP this year, after a surplus of at least 0.8% in 2023.
The election was prompted by the sudden resignation of Socialist Prime Minister Antonio Costa in November over an investigation of alleged illegalities in his government’s handling of several large investment projects. He has denied any wrongdoing.
Recent opinion polls show the centre-left Socialists leading by a slim margin, but a hung parliament beckoning, where the far-right could become kingmakers.
($1 = 0.9275 euros)
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