Mário Centeno criticizes Luís Montenegro over fiscal policy

Former Governor of the Bank of Portugal, Mário Centeno, has criticized the government of Prime Minister Luís Montenegro, accusing the Aliança Democrática (AD) of fiscal mismanagement. In an opinion piece published in Público, Centeno argues that the current administration's policies contradict economic principles, claiming they have depleted the fiscal buffers that took nearly 50 years to build.

Centeno compares the current economic situation to 2009 under former Prime Minister José Sócrates, suggesting that Montenegro’s performance is even more problematic. He highlights a significant gap between expenditure growth and revenue growth, noting a difference of 2.3 percentage points per year. According to Centeno, between 2024 and 2026, public spending is projected to increase by 25%, while the nominal economy is expected to grow by 19%.

While acknowledging positive indicators such as lower unemployment, economic growth, and falling public debt, Centeno warns of a growing deficit approaching 2% of GDP. He suggests that the 2027 Budget will require a course correction to address the rising debt and the imbalance between spending and economic expansion.