Costa considers that the current peak of inflation will not last

Costa considers that the current peak of inflation will not last

Antonio Costa took over these positions in an interview promoted by the Clube de Jornalistas, in partnership with the Lusa Agency and the Escola Superior de Comunicação Social, as part of the celebrations of the 50th anniversary of the 25 de Abril and the 40th anniversary of the club.

“This is the first state budget approved by the Portuguese,” declared the head of the executive branch, referring to the political crisis that began with the previous budget proposal and subsequent early legislative elections in which the Socialist Party won by an absolute majority. .

In this interview, with five journalists from five different generations (Henrique Garcia, Luisa Meirelles, Ana Sa Lopez, Rita Tavares and Felipe Santa Barbara), which was conducted by Maria Elisa Dominguez, Antonio Costa completely ruled out the possibility of a return to the country. coal as a response to the current energy crisis and defended the goals contained in the government’s proposal for the state budget for 2022, which will be discussed publicly in Parliament on the 28th and 29th.

On the subject of the state budget, Antonio Costa rejected the possibility that it would be a proposal for a period of six months, considering that many measures would have retroactive effects until the first of January, and considered it natural for the opposition forces to criticize them, “because it is the same thing that has already failed” last October.

“We pledged that, once elected, we would present exactly the same budget, which is the original budget, but it already includes all the commitments we made in the negotiations with the PCP – and despite this, the PCP has maintained its negative vote,” he said, referring to the episodes of the political crisis. Last.

Antonio Costa later confirmed that the budget proposal would “significantly boost income, from the start of all pensioners up to €1,108, which would have an extraordinary increase” and that would be paid retroactively until January 1.

At this point in the interview, the Prime Minister talked about measures to exempt the IRS, especially for the youngest, and of a social nature, such as free nurseries.

Regarding the fact that major international institutions estimate Portugal’s growth less than expected in the budget proposal, Antonio Costa replied that the “starting point” for implementing this year’s budget was “much better than expected”.

“The projected deficit was 4.3% and it was 1.9%. The starting point is frankly better. So, in June we will start preparing the budget for next year,” he said.

With regard to the phenomenon of inflation, the Chief of the Executive Authority referred to the expectations of the International Monetary Fund, which “confirmed that we are currently witnessing an extraordinary peak of inflation that will not continue.”

“4% inflation is expected in Portugal and in 2023 [o FMI] Estimated 1.5%, in other words, a pretty big drop next year. Other institutions are less optimistic, but the European Central Bank (ECB) is pointing at the same path, realizing that we will tend to stabilize in the eurozone with inflation around 2%,” he claimed.

Then Antonio Costa noted that in the past 12 months, in Portugal, there was 2.2% in terms of inflation, although last month it was above 5%.

“In spite of everything, we are the third or fourth country in the European Union with lower inflation thanks to the energy policy and the measures taken in October to control price hikes. In the coming months, we have to take strong action on the price formation process. In this sense, I hope that this Friday, the Council of the Republic will actually agree to reduce the tax on petroleum products (ISP) in an amount equal to the amount that was to be reduced in value-added tax,” he said.

Antonio Costa also considered it necessary that the European Commission soon approve the proposal of Portugal and Spain to avoid polluting electricity prices with gas.

“But it would be absurd to go back to coal. Portugal must speed up the energy transition,” he added.