Municipalities with a budget surplus of 268 million in 2024

Municipalities will have presented a budget surplus of 268 million euros in 2024, higher than the 27 million recorded in the previous year, but lower than the forecast of 474 million contained in the report that accompanied the State Budget proposal for 2024, warns the Public Finance Council (CFP) which analyzed 305 of the 308 Portuguese municipalities and says that “the increase in the surplus compared to 2023 results from a growth in effective revenue, higher than that seen in effective expenditure”.

Revenue grew by 10% (1.1 billion), supported by the increase in transfers from the Central Administration, both traditional transfers under the Financial Regime for Local Authorities and Intermunicipal Entities (RFALEI) and through the Decentralization Financing Fund. Municipal tax revenue grew by 2.0%, at a slower rate than that recorded in 2023 (2.6%).

In 2024, actual expenditure grew by 7.9% (900 million) compared to 2023, determined by primary current expenditure. The highest growth occurred in the acquisition of goods and services (13%) and personnel expenses (7.2%), reflecting the process of decentralization of powers and salary increases. “It is important to note that the available data still do not allow a solid and rigorous calculation of the amount of municipal expenditure that results directly from the process of decentralization of powers. This situation results from strong limitations in the data, already addressed in the CFP Report on the budgetary evolution of the AL in 2023”, it highlights.

The Public Finance Council also states that, despite some improvements, “the information available for the analysis of outstanding expenditure continues to be affected by the incomplete level of the respective reporting and the inconsistency of some of the reported data”, adding that, “even so, the information obtained by the CFP allowed us to conclude that there was a decrease in non-financial liabilities, accounts payable and late payments in 2024. The average payment period (PMP) of municipalities worsened by one day, to 22 days, despite the unavailability of data for 17 of the 308 municipalities, which may bias this comparison”.

The total municipal debt of 303 of the 308 municipalities – financial and non-financial debt – considered for the purposes of the legal limit, increased by 80 million (2.3%) to 3,624 million. “Based on this indicator alone, at least 10 of the 303 municipalities for which information is available were above the total debt limit on December 31, 2024, that is, two fewer than at the end of 2023. This evolution reflects the increase in debt of 360 million observed in 112 municipalities, which more than offset the reduction of 280 million reported by the remaining 191 municipalities”.