Here are some of the key points from the OE2024 proposal:

Economic growth revised downwards

The Government forecasts Gross Domestic Product (GDP) growth of 2.2% this year and 1.5% in 2024.

The OE2024 forecast means an upward revision for this year compared to the 1.8% predicted in the Stability Program, but downward compared to the 2% for 2024.

Inflation expected to fall

The Government projected an inflation rate of 8.1% in 2022 to 5.3% in 2023 and 3.3% in 2024.

The forecast included in the budget proposal compares with the Stability Program projection, which pointed to a Harmonized Consumer Price Index (HICP) of 5.1% in 2023 and 2.9% in 2024.

According to Government forecasts, the Consumer Price Index (CPI) is expected to slow from 4.6% in 2023 to 2.9% in 2024, with the difference between the two indices reflecting differences in the composition of the basket.

Surplus of 0.2% in 2024

The Government expects to achieve the best budget balance in the history of democracy this year, pointing to a surplus of 0.8% of GDP, and 0.2% in 2024.

The forecast means an improvement in the deficit of 0.4% of GDP for this year and 0.2% for 2024, projected in the Stability Program.

Public debt burden

The budget estimates that the public debt ratio will fall to 103% this year, and stand at 98.9% in 2024, for the first time since 2009.

The forecast points to a drop from the 112.4% recorded in 2022 that is greater than that predicted in the Stability Program, a document in which it pointed to a ratio of 107.5% this year and 103% in 2024.

Update of IRS levels

The limits of the IRS brackets will be updated by 3% in 2024 and the rates for the first five brackets will decrease.

Based on this update, the limit for the first taxable income bracket increases from 7,479 euros to 7,703 euros, with the rate falling from the current 14.5% to 13.25%.

The limit for the second and third tiers increases, in turn, from the current 11,284 and 15,992, respectively, to 11,623 and 16,472 euros. Alongside the update, OE2024 determines a reduction in the rate applicable to these tiers, which drops (in the case of the second tier) from 21% to 18% and from 26.5% to 23.00% (in the third tier).

National minimum wage rise

The budget proposal for 2024 includes an increase of 60 euros in the national minimum wage next year, to 820 euros.

“The minimum wage will be updated by 7.9%. It is an increase of 60 euros. As far as I believe, it is the largest annual increase in the minimum wage that has ever occurred”, said the Prime Minister on Saturday, in Lisbon, at the headquarters of the Economic and Social Council, after signing with the social partners the Reinforcement of the Medium Term Agreement of Improving Income, Wages and Competitiveness.

Increase in pensions

The Minister of Finance announced that the average increase in pensions next year will be 6.2%.

Fernando Medina guarantees that “the vast majority of Portuguese pensioners” will have increases “above inflation values”.

The Government plans to update all pensioners subject to regular updating, a measure that covers around 2.7 million beneficiaries.