The Portuguese government will also increase social assistance for the poorest families to €30 per month, a measure that will go hand in hand with an allowance of €15 per child.
The Portuguese government on Friday announced new measures to help households deal with the inflation crisis, including the application of a “zero rate” of VAT on a range of basic food items. “We hope that this measure will lead to a reduction” and “price stability”, declared Finance Minister Fernando Medina, adding that ongoing negotiations with the food production and distribution sectors should take place next week.
The socialist executive has also decided to increase social assistance for the most humble families to up to 30 euros a month and an allowance of 15 euros per child. This measure, which will affect more than a million families, will be paid from April, Labor Minister Ana Mendes Godinho said. These provisions also include an “extraordinary” 1% increase in the salaries of some 740,000 civil servants and an increase in their meal allowance.
An envelope of additional aid worth 2.5 billion euros
The government will fund these measures thanks to the fiscal margin freed up last year, with a public deficit that has shrunk to 0.4% of GDP, while the original target was to close it in 2021 after an imbalance of 2.9% to be reduced to 1.9%. The accounts allow us to take action in favor of families”, with a budget for additional aid of 2.5 billion euros, the finance minister welcomed.
Inflation in Portugal has started to slow down since hitting a 30-year high of 10.1% last October. The increase in prices, recorded at 7.8% for the whole of last year, should be limited to 4% this year according to the government or 5.8% according to the Bank of Portugal.