Pandemic costs to 680 million euros until April

The Covid-19 pandemic cost 680.2 million euros in Portugal up to April, according to the Summary of Budgetary Execution released by the Directorate-General for Budget (DGO).

“Up until April, the implementation of the measures adopted in the fight against and prevention of Covid-19, as well as those aimed at restoring normality, led to a reduction in revenue of 319.9 million euros and an increase in expenditure of 360.3 million euros,” totalling 680.2 million euros, according to the document released on Tuesday.

On the revenue side, the extensions of tax payments until April which were remitted for the second half of the year, for a period of up to six months, amount to 229.4 million euros for VAT and 90.5 million euros for personal income tax.

However, in the table released by DGO, the figures for the suspension of tax revenue, an extension of Social Security contributions and suspension of tax executions of Social Security contributions are not yet available.

On the expenditure side, the measure with the greatest impact was the temporary layoff, totalling 144.6 million euros, followed by expenditure on Health (“Personal protective equipment, medicines and others”), which cost 82.4 million euros.

The item that follows with the greatest impact on expenditure was Ventilators and other intensive care equipment, which totalled 45.5 million euros, followed by extraordinary support for the reduction in economic activity, which was 22.1 million euros.

Exceptional support to families cost the state coffers 13.8 million euros, prophylactic isolation 12.3 million euros, and other services associated with Individual Protection Equipment cost 10.3 million euros.

The extension of unemployment cost 6.1 million euros, the reinforcement of human resources (hiring and overtime) cost 4.7 million euros, support for telework 2.4 million euros and other charges 1.1 million euros.

The Directorate-General of the Budget included in the expenditure of financial assets the Support Line for Microenterprises in the Tourism Sector, budgeted at 15 million euros.

The table provided by the DGO presents the expenditure carried out by the measures listed in the 2020 Stability Programme, by economic classification and by general government sub-sector.

In the section dedicated exclusively to quantifying expenditure associated with Covid-19, the DGO noted that if by March some impact of the pandemic was already evident, it became more expressive in April and its impact and individualisation will become clearer in subsequent periods.

This process will be due to the time inherent in the implementation of the processes of realisation of public expenditure (from authorisation to payment) and its accounting and subsequent monthly reporting of information to the Ministry of Finance, as well as the better perception of the impact on revenue, according to the DGO document.

The data presented in the budget implementation refer only to the main measures with a budgetary expression in the general government and, not being exhaustive, are identified at this stage, the most significant.

The DGO said that the value of expenditure commitments already made in Central Administration and Social Security will be more clearly reflected in the expenditure of the following months, due to the time lag already mentioned.