Until September, the general government deficit amounted to 6344 million euros, corresponding to 4.9% of Gross Domestic Product (GDP), said the National Statistics Institute (INE). The estimate leaves out the impact of the recapitalization of the New Bank, for which registration in the public accounts remains to be done, depending on the moment now that the institution which added the good assets of the BES is sold.
The figure compares with the 5.7% registered to the same period last year. And also represents an im provement on the value of the deficit recorded in the first six months of this year, 6.5%.
The improvement is due to increased revenue at a faster pace than expenditure , 3.3% and 1.6%, respectively. In particular, the INE emphasizes the growth of the amount collected by the State for taxes on income and wealth, which increased 5.8% in the first nine months of the year, and with taxes on production and imports, whose revenue increased a rate of 7.4%.
Because the increase in revenue was greater than the strengthening of expenditure, borrowing of general government decreased, falling to an amount equivalent to 4.3% of GDP.
On the revenue side, there was an increase in taxes on production, imports, taxes on income, wealth and contributions at the same time decreased the remaining components of revenue. On spending, the trends were also mixed:. While there was an increase in personnel expenses, social benefits, interest and intermediate consumption, there was less expenditure made in investment and capital expenditure call
Injection in BES to file
In calculating the general government balance, INE does not include “any impact of the recapitalization of the New Bank made by the resolution fund,” This is due to the “provisional nature of the registration effected”, the statistical institute says he is “conditioned by the lack of information about the whole operation (then capitalization of privatization)”. Accounting, says the INE, will only be revalued in March, when it is sent to Brussels the next notification of the Excessive Deficit Procedures.
If the sale of the New Bank (created on August 3 with the implosion of BES) happen “in a short time (less than one year), the two operations – capitalization and privatization – will have to be analyzed together.” So dictate the rules of the Manua l Deficit and Debt general government, vinca INE, stressing that there is not enough information to evaluate the capitalization operation “in final terms” for the sale of the New Bank has not yet occurred .
For now, the capitalization of 4900 million – the amount of capital stock of the New Bank – “will be reflected only in terms of financial account of general government with no impact in its lending “. This is because, if the revenue from the sale is not less than the capital injection, “there will be no impact on the deficit”; but if the value is lower, the negative impact on public finances will depend on the difference between the capital injection and the sale value.
different scenario happens if the sale of the bank not happen this time. According to the rules, the New Bank achieve sufficient profitability margin, “there will be the registration of a financial transaction with no impact on the deficit,” but if it can not, the transfer of capital is recorded, with impact on the deficit.
This year, the deficit target that the Government is committed to the European Commission is 4.8% of GDP, an objective which was reviewed by the executive in September. The limit initially set was 4%.
Funding rises, savings decrease
the Portuguese economy financing capacity increased slightly in the third quarter. The improvement was possible because increased power savings, which in turn is due to the fact that the increase of disposable income have offset the increased cost of the final consumer. All in all, the financing capacity increased to 1.9% of GDP, up 0.3 percentage points from the previous quarter.
On the contrary, reduced the capacity and financing of households (to 5, 4% of GDP). As the increase in household consumption expenditure offset the slight increase in disposable income, savings fell sharply. And with that, the savings rate rose dc 10.3% in the second quarter to 9.7% in the third.
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