Under the Budgetary Framework Law, the CFP’s mission is “to pronounce on the objectives proposed in relation to the macroeconomic and fiscal scenarios, on the long-term sustainability of public finance and on compliance with the budget balance rule, with the central government expenditure rule and the regional and local government indebtedness rules laid down in their respective finance laws.” This independent assessment that supports fiscal transparency contributes to the quality of democracy and of economic policy decisions and enhances the State’s financial credibility, under the terms of the CFP’s Statutes.
Under the combined provisions of the applicable Community legislation and the Budgetary Framework Law, the CFP supervises compliance with the numerical fiscal rules and endorses the macroeconomic forecasts underlying the budgetary programming documents.
The CFP’s mission is focused on the current and future fiscal and financial effects of political decisions and public sector management. Thus, the CFP differs from other specialized bodies that supervise and monitor the management of the entities making up the public sector.
The CFP supports the public finance monitoring mechanisms that bring about a medium-term framework consistent with a sustainable path, while respecting the principles of transparency. This framework is one of the key pillars of a stable macroeconomic environment, which is a necessary condition for increasing the Portuguese economy growth capacity.
The CFP’s tasks
In order to fulfil its mission, the CFP’s Statutes assign it the following tasks:
- Assessment of the macroeconomic scenarios adopted by the Government and the consistency of budget projections with those scenarios;
- Assessment of compliance with the fiscal rules;
- Analysis of the dynamics of public debt and its sustainability;
- Analysis of the dynamics of existing commitments, with special emphasis on the pensions and health systems and on public-private partnerships and concessions;
- Assessment of the financial position of regional and local governments;
- Assessment of the economic and financial situation of public sector enterprises;
- Analysis of tax expenditure;
- Monitoring of the budget outturn.
The Budgetary Framework Law also assigns the CFP a decisive role in the recognition of a significant deviation from the medium-term objective and in the deviation correction mechanism, in line with the assessing of compliance with the fiscal rules and pursuant to the Community legislation. The CFP is also charged with appraising the macroeconomic scenario underlying the budgetary programming documents.
The publication of documents is the main instrument used by the CFP to fulfil its mission. The CFP is required to produce publications on:
- The Stability Program and other procedures within the European regulatory framework of the Stability and Growth Pact;
- The Multiyear Budgetary Programming Framework (which will be replaced by the Multiyear Public Expenditure Framework as from 1 April 2020);
- The Draft State Budget.
The CFP shall also analyse the sustainability of public accounts and other matters it deems relevant, including an assessment of the previous year budget outturn. All publications produced by the CFP shall be sent to the President of the Republic, Parliament, the Government, the Court of Auditors and the Bank of Portugal. All publications are made available on the CFP’s website.
Independence is one of the core features of the CFP when performing the functions assigned it by law and its statutes. The CFP cannot request nor receive instructions from Parliament, the Government or any other public or private entity. Its financial independence is guaranteed through the State Budget.