“Today’s stability is a very important asset that cannot be wasted”

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“Industries with higher added value have made a greater contribution to job creation since the start of the pandemic. It’s a transformation that rarely appears in the news. But quarter after quarter, what prevails is job creation. Today we have one million more than ten years ago”, analyzed the governor of the Bank of Portugal during the 2024 Public Policy Forum.

Mário Centeno argued, this afternoon, at the 2024 Public Policy Forum, that the stability that Portugal benefits from today is “a very important asset that cannot be wasted”, highlighting the crucial role of the labor market in these numbers.

According to the governor of the Bank of Portugal (BdP), “the great success of the Portuguese economy is the reduction of private debt”, later “accompanied by public debt”.

The former Minister of Finance highlighted the growth “close to potential under the conditions we live in, with the increase in interest rates, in a context in which external demand in the Portuguese economy in the last year is inferred from that recorded in the economic assistance program and financial situation, before the pandemic”.

Mário Centeno also made it known that the Portuguese economy is viewed with optimism in the European context.

“In terms of public finances, Portugal is one of the three countries in the euro area that currently have a balanced balance,” he added.

Regarding inflation, which “at this point is already in the past”, Centeno points to its decline without a recession scenario. “Inflation is back to values ​​below 3%, but monetary policy must follow this reality. We are in the final phase of the inflationary process. Let’s do it for the first time without a recession. Much is due to the job market. Almost everything is due to the job market: the companies and the workers,” he added.

Centeno also found that “inflation had a cycle very similar to the euro area. It’s an excellent sign for Portugal. We could have avoided the 10.6% in October 2022.”

Still on the strength of the labor market, the former president of the Eurogroup stated that “there are 500 thousand new contracts every quarter”. “It is a very significant number, 28% higher than what was recorded in 2017”, he continued, clarifying that, regarding the salary level of the population in Portugal, “it is not true that the increase in the average salary is especially justified by the increase in the minimum wage ”.

“Industries with higher added value have made a greater contribution to job creation since the start of the pandemic. It’s a transformation that rarely appears in the news. Job creation never appears in the news. What is reflected is the destruction of jobs. But quarter after quarter, what prevails is job creation. Today we have one million more than ten years ago”, explained the governor of the Bank of Portugal.

Centeno also highlighted savings levels in Portugal, and the consequent improvement in rating decisions. “Savings continue to increase. Negative interest rates are not good incentives, but the savings rate remains. This is reflected in the improvement of the Republic’s rating. All agencies gave a level A rating, which benefits the State, companies, families and the cost of financing the economy”.