June 23, 2022
According to research conducted by a Portuguese parliament’s research unit, the impact of the Covid-19 pandemic, rising inflation, the war in Ukraine, and spending for the Recovery and Resilience Plan (RRP) for post-pandemic recovery added a total of a negative €1.403 billion to the public sector accounts in the first four months of this year.
The overall balance was worsened by €1,403 million as a result of the known direct effect of the Covid-19 damage mitigation measures, the “inflation and Ukraine” package, and the RRP measures, according to a report published by the Technical Budgetary Support Unit (UTAO) that examined budgetary developments from January to April on a public accounting basis.
The unit notes that the Covid-19 policy measures “hurt” the overall balance by €1.239 billion, or “much” less (€1.052 billion less) than the same period previous year, when €2.290 billion was spent on that goal. The unit was established to provide technical support to members of parliament.
The report also shows that the budgetary situation was made worse by €165 million in spending on policy initiatives to reduce the impact of inflation on household buying power and on production costs in several sectors affected by the conflict in Ukraine.
The cost of implementing the RRP on the subsidies side came to €54 million, but it had no effect on the total balance because it had been wholly covered by community [EU] subsidies up until the end of April.
The UTAO also cites the state budget for 2022, which predicts a “substantial reduction” in public sector spending on pandemic-related measures for the entire year as compared to 2021’s implementation.
Source: Eco News Portugal
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