Interest rates could fall below 2% in 2025. Economy with good prospects, says João Leão.

Former finance minister considers that interest rates could fall in 2025 to stimulate the economy, which will benefit from a year of large public investment, but warns that, to avoid “new belt tightening”, Portugal needs 70 to 80 thousand new immigrants per year.

In an interview with , the former Minister of Finance João Leão says that interest can fall to less than 2% in 2025 “to provide temporary stimulus to the economy”, argues that the State must pay higher positions better.

João Leão does not rule out the possibility that the European Central Bank will be forced, during this year, to aggressive interest cutswhich can take rates to values below the 2% target.

The former Minister of State and Finance in the government of António Costa, who held the portfolio between 2015 and 2020, considers that lack of competition in banking in the last three years, in which “the rise in interest rates was not applied in the same way in credits and in the remuneration of deposits”.

For João Leão, the perspectives on the Portuguese economy for 2025, despite the difficult situation in Europe, are quite positivedue to two important factors: the “robustness of the continuation of the consumption growth families”, which will help to boost the economy, and the “strong additional dimension of investment”.

“2025 will be a year of big increase investmentpartly driven by public investment, are years of great implementation of the PRR“, says João Leão, who also hopes that there will be some recovery in private investment.

“There are some in which Portugal has great incentives to investparticularly in the housing, renewable energythere are lots of spaces” in which investment is expected to help boost economic growth in 2025, highlights João Leão.

The current member of the European Court of Auditors considers that, with regard to the public accounts provided for in the OE, expenditure growth is unsustainablebut admits that the year could “close with a residual deficit or a surplus temporary”.

“The year 2024 ended with a surplus probably close to 0.5%, much lower than that achieved in 2023, now we will have this year, after years of surplus, the doubt as to whether this surplus will be maintained or not“, it says.

For now, “the economy and revenue are helping to maintain public accounts in a positive way”, something that has already happened in 2024, highlights the former minister. But it confirms what I said a year ago: governing with a minority “implies risks for public accounts.”

In the interview, broadcast on RR’s Dúvidas Públicas podcast, João Leão is also concerned about the aging of the population — and remembers that Portugal needs 70 to 80 thousand new immigrants per year, to avoid economic stagnation and a new belt tightening.