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Portuguese government favours European Central Bank’s decision to stop rate hikes

Portugal’s government took a positive view on Thursday of the European Central Bank’s (ECB) outlook for inflation to be close to 3% by 2024 and maintained its critical stance on successive interest rate hikes.

At a press conference at the end of the cabinet meeting, the Minister for the Presidency, Mariana Vieira da Silva, was asked about the fact that the ECB had signalled today that it could be facing the last increase in the three reference rates since inflation in 2024 is expected to be around 3% in the eurozone.

In her reply, the minister for the presidency began by saying that she had not yet had the opportunity to listen to the statements made by ECB President Christine Lagarde after the central bank decided to proceed with the tenth consecutive increase in the three reference rates, this time by 25 basis points.

“The prime minister and the finance minister have commented on [the ECB’s interest rate rises] several times. But it’s naturally good to recognise that inflation is on a [downward] trajectory. In many countries, it is approaching the value indicated by the ECB as a reference for the coming years,” said Mariana Vieira da Silva.

According to Mariana Vieira da Silva, due to the ECB’s new interest rate hike, “the response that the government approved” in the previous legislative session will be improved.

“We will add other measures to this response because we know that, along with health, housing is another of the Portuguese people’s biggest concerns. Now is the time to evaluate our measures,” she said, referring to the legislation the government intends to approve next week.

With regard to the ECB’s policy of increasing interest rates, the minister of the presidency refused to add any more judgements about previous positions taken by the Portuguese government.

“On Wednesday, the prime minister announced that a week from today, at the next cabinet meeting, we will approve the legislation that aims to respond in an updated way to the needs that Portuguese families feel regarding mortgage loans,” she noted.

According to Mariana Vieira da Silva, “more than 185,000 families” have been covered by rent support.

“And our expectation is that next week’s measures will be a response to the new context and an improvement on the legislation we approved before the summer,” she added.

(Pedro Morais Fonseca

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