Friday, February 26, 2021

Each month of confinement costs the state more than 600 million

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António Pedro Santos / Lusa

The Minister of State and Finance, João Leão

For each month of confinement, public accounts suffer an impact of at least 600 million euros, a value composed of the lay-off and VAT revenue.

According to a source from Finance to the TSF on Thursday, the lay-off is expected to cost about 300 million monthly, as well as VAT revenue, thus totaling 600 million euros of impact on the state coffers.

The Executive does not foresee the need to move towards a amending budget, since the State Budget for 2021 (OE2021) already contains an allowance for contingencies covid and the tax revenue of 2020 was higher than the forecast for 2,200 million euros. Even so, the revision of the deficit estimate will be “significant”.

In OE2021, the Ministry of Finance pointed to a deficit of 4.3% this year, after a negative balance of 7.3 in 2020. After knowing that the 2020 execution went better than expected, it pointed to a value of budget balance close to the 6.3% foreseen in the supplementary budget.

The “significant revision” of the balance of public accounts should not imply a deficit in 2021 greater than that of 2020, said the same source, remaining fixed between 4.3% e 6.3% do PIB.

According to this Friday’s edition of the weekly Express, the impact on the public accounts of the confinement, which is expected to continue until March, was not in the plans of António Costa’s executive when he designed the OE2021. Despite this, João Leão’s team is not yet preparing a second budget.

“At this stage, we do not yet anticipate the need for an Amending Budget, but as the context is highly uncertain, it cannot be excluded,” a source from the Ministry of Finance told the weekly, noting that the Budget has a special allocation for contingencies related to pandemic that is centralized in Terreiro do Paço.

Taísa Pagno Taísa Pagno //

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Each month of confinement costs the state more than 600 million