LISBON, April 17 (Reuters) - Portugal on Monday approved
an additional 3.57% hike in public pensions from July following
criticism that it was benefiting from rising tax revenues due to
high inflation without sharing those gains with the country's
3.7 million pensioners.
In October the government gave a bonus, equivalent to half a
monthly pension, to all recipients but suspended the formula for
calculating future pensions, which depends on inflation and
economic growth. If applied, it would have increased pensions by
8% on Jan. 1, 2023.
Instead, they rose by only between 3.89% and 4.83%, sparking
criticism from opposition parties across the spectrum.
In Portugal, over 1 million pensioners receive less than 500
euros per month. With inflation rampant, they have lost a
considerable amount of purchasing power over the past year.
Prime Minister Antonio Costa said that with the new hike,
"pensioners will have updated pensions at the same amount that
would result from the law" that was suspended in October.
The parliamentary bench leader of the main opposition Social
Democratic Party, Joaquim Miranda Sarmento, countered that "the
government continues to take advantage of high inflation to
fatten the state and only gives back to the Portuguese a little
bit."
Earlier on Monday, the government raised its 2023 economic
growth forecast to 1.8% from 1.3% predicted in November, still a
sharp slowdown compared to last year's 6.7% amid stubbornly high
inflation.
However, it also raised this year's inflation projection to
5.1% from 4.0%, which compares with last year's peak of 10.1% in
October. The budget deficit should end this year at 0.4% of GDP,
the same as in 2022.
(Reporting by Sergio Goncalves; Editing by David Latona and
Grant McCool)
Messaging: sergio.goncalves.reuters.com@reuters.net))
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