Portugal Says Achieving Balanced Budget in 2024 Now 'Extremely Difficult' After Storm Costs
Portugal's Fiscal Challenges and Economic Outlook in 2024
Storm Costs Threaten Budget Goals
LISBON, May 22 (Reuters) - Portugal will find it extremely difficult to achieve a balanced budget this year after storms in January and February cost the state €2 billion ($2.3 billion), or about 0.6% of GDP, Economy Minister Manuel Castro Almeida said on Friday.
Previous Budget Expectations
Three weeks ago, the government said it expected a balanced budget this year, with no deficit or surplus, after previously forecasting a small surplus of 0.1%, down from 0.3% in 2025.
Government's Commitment to Fiscal Discipline
"The government has not given up on the objective of reaching a balanced budget, but we're aware that it's an extremely difficult objective after the €2 billion the storms have cost us," Castro Almeida said in parliament.
Impact of Storms on Economy and Infrastructure
The severe storms and floods hit central areas of mainland Portugal, a region key to the country's economy, causing extensive damage to businesses, homes and infrastructure and generating more public spending as well as lost tax revenue.
Maintaining International Reputation and Investment
Castro Almeida said Portugal's "good international reputation" and fiscal discipline, with debt below 90% of GDP, continued to support foreign investment, alongside plans to cut corporate taxes.
Economic Growth Amid Adversity
The storms and higher energy prices linked to the Iran conflict stalled the economy in the first quarter, but the government expects it to grow 2% this year, slightly above 1.9% in 2025.
Currency Exchange Rate
($1 = 0.8623 euros)
Reporting Credits
(Reporting by Sergio Goncalves; editing by Gus Trompiz)
