Portugal PM sees 2024 budget surplus despite first-quarter gap

Portugal's new government still expects to achieve a budget surplus this year despite an unexpected first-quarter deficit that it attributed to last-minute spending by the previous administration, Prime Minister Luis Montenegro said on Wednesday.

Portugal swung to a public deficit of 259 million euros ($281.04 million) in the first quarter from a surplus of 5.1 billion euros a year ago. "I'm not scared by that," Montenegro told parliament during a debate. "We have the capacity to manage public finances... so that we can reach the end of the year and be able to effectively have a budget surplus, it's a commitment that I reiterate."

The minority centre-right government has estimated its Socialist predecessors approved up to 2.5 billion euros in spending measures and commitments between November, when former premier Antonio Costa resigned, and March, when the country held a general election. Montenegro said that "the accounts are not out of control" because the government stopped the previous flow of extraordinary expenditure.

Socialist Party leader Pedro Nuno Santos said the government's rhetoric about a dire budgetary setting inherited from his party was not true, citing the European Commission's opinion that "public accounts in Portugal are healthy". The government has forecast a budget surplus of 0.3% of GDP this year, basing its projections on unchanged policies and without including its own measures such as tax cuts, down from a budget surplus of 1.2% in 2023.

The European Commission on Wednesday estimated an even higher surplus of 0.4% in Portugal this year. ($1 = 0.9216 euros)