The proposal for the State Budget for 2021 (OE2021) was approved this Wednesday in the Assembly of the Republic, with the favorable votes of the PS and the abstention of the PCP, PAN, PEV and the two non-registered deputies. No surprises compared to what had already been pre-announced, OE2021 received the votes against PSD, CDS-PP, Chega and Liberal Initiative, as well as the Left Bloc (BE) bench.
OE2021 was thus made generally viable with 108 votes in favor of the PS and 105 against the parties on the right and BE. The diploma now goes on to discuss the specialty, where article by article will be analyzed and where parties with parliamentary seats will try to include proposals in the final document.
The discussion of OE2021 in the specialty may, however, bring some complications to the Government, as was evident in the discussion of the budget proposal that preceded the vote in general. The PCP, PAN and ENP - parties that helped the Government to make the Budget viable in this first phase - promised to insist on proposals that were rejected by the Socialist Executive and are not committed to approval in the final global vote.
The blockers bet on a divergent route from that of the Government and the remaining parties on the left and PAN, however, guarantee that they are "open" to renegotiate, should the Socialist Executive decide to "reconsider" proposals in the specialty. After being accused by BE of having a "systematic alliance" with the right in matters of labor laws, the Government came to commit itself to review labor legislation and was willing to extend social support.
On the right, the PSD classified OE2021 as a “vegan stroganoff budget”, as its sole objective was “to please the PCP and PAN”, and they say that the economy is “the Wally of this budget: everyone talks about it, but nobody sees it” . The absence of significant support for companies is a common criticism of the other parties on the right, who still point the finger at “Lack of transparency” in the State's accounts, as the Public Finance Council said and the Technical Budget Support Unit (UTAO).
The Government's proposal provides for a 8,5% recession this year and a 5,4% economic recovery for 2021. The Government also estimates that the economy will grow 3,4% again in 2022, "the year in which a level of GDP [Gross Domestic Product] equivalent to that recorded in the pre-pandemic period" is reached. As for the public debt ratio, the Executive forecasts an improvement in 2021, to 130,9% of GDP, after reaching 134,8% in 2020.
In macroeconomic terms, the Government also projects a budget deficit ratio of 7,3% of GDP this year, followed by a drop to a negative balance of 4,3% next year. Unemployment is expected to rise this year to a rate of 8,7%, dropping in 2021 to 8,2%.
The final global vote for OE2021 is scheduled for 26 November.