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General government administrations recorded a budget surplus of 179 M€ in the 1st quarter, the equivalent of 0.4% of the Gross Domestic Product (GDP) generated in the period. It is the first surplus in the 1st quarter in all the quarterly statistical series. This figure appears to be in line with the annual goal for 2019 as impacts of the one-off measures foreseen in the Stability Programme, with  an unfavourable effect of 0.5% of GDP, are not yet taken on board.


The primary balance (excluding interest) amounted to 1784 M€ in the 1st quarter, equivalent to 3.6% of GDP, continuing the primary surpluses trajectory started in the 3rd quarter of 2015.

Budgetary developments in the 1st quarter convey a positive indication concerning the government's budget annual target (-0.2% of GDP) achievement. However, the following quarters will be important to confirm this perspective since, despite the favourable behaviour of tax and social contributions, several factors will affect budgetary developments until the end of the year.


Those factors will entail expenditure accruals and include the Novo Banco recapitalisation, whose negative impact on the balance (0.6% of the annual GDP) will be partly mitigated by the higher volume of dividends in the financial sector, the valorisation of public administrations wages and the extraordinary compensation by the Municipality of Lisbon in the follow-up of judicial decisions In addition to these risks. There are also budgetary pressures coming from the health and education sectors and uncertainties concerning the full recovery of the remainder of the State guarantee provided to the Banco Privado Português and the expenditure review results.


General government revenue grew 6.2% in the 1st quarter compared to the same quarter of the previous year, above the expected by the Ministry of Finance for the whole year (4%). Public spending increased 2.6%, at a pace lower than that foreseen in the 2019-2023 Stability Programme for the whole of the year (3.3%).


As a result of a significant increase in deposits, public debt rose to 123% of GDP in the 1st quarter, moving away from the end of year target (118.6% of GDP). Thus, net of deposits debt decreased 0.8 p.p. of GDP since the end of 2018.

Date of last update: 11/07/2019

Budget Outturn . Report nº 7/2019 . 11 July 2019