Second notification – September 2021

Excessive Deficit Procedure

According to the European Union regulations, Statistics Portugal will send to Eurostat, until the end of the current month, the second notification of 2021 concerning the Excessive Deficit Procedure (EDP).

The estimate of net lending of the Regional Government of Madeira (RGM) for 2020 stood at 123.7 million euros, 3.2 million euros higher than reported in the 1^st notification of this year, in which 2020 data were preliminary. After seven consecutive years in which the RGM accounts recorded a surplus, the 2020 deficit reverses that trend. This can be explained by the crisis caused by the COVID-19 pandemic that had an estimated impact of 142 million euros, associated with measures of prevention, containment, mitigation and economic recovery in the scope of the COVID-19 pandemic. Without this amount, the RGM would have maintained a surplus in its accounts. It must be highlighted that the losses associated with non-generated revenues are not included in the abovementioned 142 million euros, such as the significant decrease in tax revenues, whose figures, in Public Accounting dropped around 103.5 million euros (-10.8%) compared to 2019. This loss reflects the pronounced reduction in the economic activity during 2020, and led to a drop in the total receipts of the RGM between 2019 and 2020, while, on the other hand, the total expenditure increased, due to the growth in current expenditures, derived by the measures taken by the Regional Government to fight against the consequence of the pandemics.

The Regional Gross Debt stood at 5,109.0 million euros at the end of 2020, having increased by 446.0 million euros (+9.6%) compared to 2019, and is the highest value ever recorded for this macroeconomic variable. This significant growth is exclusively due to the Region's borrowing of EUR 458 million, following the authorisation granted by the State to the Region in order to cover exceptional financing needs, deriving directly or indirectly, from the COVID-19 pandemic. Without this loan, the amount of gross debt would have continued the downward trend that started in the previous quarter and would be around 4.651 billion Euros.

The net lending of the General Government (GG) in 2020 amounted to € 11.7 billion euros, corresponding to 5.8% of the Portuguese Gross Domestic Product (GDP). In turn, the gross debt of the GG stood at  270.5 billion Euros, representing 135.2% of the GDP.

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