LISBON, Portugal (AP) — With a general election on the horizon, Portugal’s government is promising a financial windfall after years of austerity. The center-left Socialist government’s 2019 budget proposal unveiled Tuesday offered lower taxes, higher…
LISBON, Portugal (AP) — With a general election on the horizon, Portugal’s government is promising a financial windfall after years of austerity.
The center-left Socialist government’s 2019 budget proposal unveiled Tuesday offered lower taxes, higher pay for government workers, pension increases, more jobs, and lower energy and public transport prices.
Finance Minister Mario Centeno said those measures are possible due to healthy economic growth, higher tax revenue, more efficient spending and savings on interest rates.
Centeno, who chairs meetings of the 19-nation eurozone’s finance ministers, said that successfully keeping a lid on public spending in recent years will bring a budget deficit next year of 0.2 percent — the lowest in more than 40 years — down from an expected 0.7 percent this year.
Portugal needed a 78-billion euro ($90 billion) bailout in 2011, after recording a deficit of more than 11 percent the previous year, amid the European debt crisis.
“This is the result of a long road which the Portuguese, with great merit, completed,” the budget proposal said of the forecast deficit.
The government predicts growth of 2.2 percent next year, down from an expected 2.8 percent this year. The International Monetary Fund forecasts 1.8 percent growth for Portugal in 2019.
Public debt is seen dropping to a still-high 118.5 percent, from around 122 percent in 2018. The government forecasts the jobless rate falling to 6.3 percent from the current 6.8 percent.
It is also pledging to add 9,000 staff to the public health service and more than 6,500 teachers at schools.
Labor groups noted the government has made similar pledges in the past and later reneged on them.
The main opposition Social Democratic Party accused the government of chasing votes.
The minority government’s spending proposal requires the approval of parliament and the country’s president. The Socialists have the backing in parliament of the Portuguese Communist Party and the radical left Bloc, giving it enough votes to pass legislation.