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increase can reach 45%

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increase can reach 45%

Installment on a house will increase, and very sharply: within a year, the provision of a loan of 150 thousand euros can increase up to 45%, CNN Portugal pointed out on Monday – in less than two months. Two months later, the European Central Bank (ECB) raised its base interest rates from zero to 1.25%, up 0.75 percentage points over the last week.

Indeed, for a loan of 150 thousand euros, for a period of 30 years, indexed to Euribor for six months, it goes from paying just over 454 euros in April this year to almost 660 euros in April 2023. And this is in a conservative setting.

“We believe we are far from the level that we hope will see inflation return to the medium-term target of 2%,” said Christine Lagarde, President of the ECB, assuring that interest rates will rise even more. “It may be more than two ascents, but it will probably be less than five. I leave it to your discretion whether there will be two, three or four,” he said.

The ECB has already determined its next meetings. Two later this year, in October and December, and two more early next year, in February and March – if interest rates were to rise by 0.25 percentage points at each meeting, what would be the consequences?

In the same example of a loan of 150 thousand euros for 30 years, the monthly payment was 447 euros in October last year. The audit promised in October could increase the contribution to 580 euros per month, with a difference of more than 125 euros per month. At the December meeting, while maintaining the same increase, the contribution will increase to 660 euros plus 200 euros per month, depending on the October values.

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Economy

Banco de Portugal is revisiting high inflation this year to 7.8%. The economy grows until the end of the year, but will stop in 2023

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Banco de Portugal is revisiting high inflation this year to 7.8%.  The economy grows until the end of the year, but will stop in 2023

The Bank of Portugal revised upwards by 1.9 percentage points (pp) its inflation forecast for this year to 7.8%, the highest since 1993, reflecting growing external pressure on prices.

In its October economic bulletin released today, the Bank of Portugal (BdP) predicts that the harmonized consumer price index will hit 7.8% this year. upward revision from 5.9% forecast in Junebut still below the eurozone.

The regulator explains that inflationary pressures remain high in the second half of the year despite some signs of easing, which it estimates will see the rate stay above 9% during this period, peaking in the third quarter (9.9%) . 5%) and slightly reduced by the end of the year.

On the economic front, the BdP improved its growth outlook by 0.4 percentage points this year. to 6.7%, signaling a recovery from pre-pandemic levels in the first quarter but a subsequent slowdown that will be reflected in 2023.

In the October Economic Bulletin, released today, the organization, led by Mario Centeno, presents only forecasts for this year, but points to the impact of the slowdown in economic growth for 2023 recorded from the second quarter onwards.

“The negative effects of Russian military aggression in Ukraine have intensified over the course of the year, which suggests a relative stabilization of activity from the second quarter onwards. These effects will be more pronounced in 2023, foreseeing a significant slowdown in growth compared to 2022, with a domino effect of over 3.9 p.p. [pontos percentuais] up to 0.5 p.p. ”, it can be read.

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However, for this year, the growth forecast for gross domestic product (GDP) has been revised upward by 0.4 percentage points. up 6.7% from June, with the Portuguese economy “benefiting from a recovery in tourism and private consumption”.

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Economy

Pilots offer TAP the same logic of fleet renewal to restore working conditions – Breaking News

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Pilots offer TAP the same logic of fleet renewal to restore working conditions - Breaking News

In a statement sent to members, to which Lusa had access, the Civil Aviation Pilots Union (SPAC) cites the adage “Caesar’s wife is not enough to be serious, she must look serious” to criticize the TAP option.

“Following the justification rationale from those who choose to purchase cars during this very challenging time, which is based on miraculous savings, we offer the same “spend more to save” logic to restore dignity. workers,” the union said in a statement.

This is the news, reported by TVI/CNN Portugal and Away portal, that TAP has ordered a new fleet of BMW cars for administration and managers, replacing Peugeot cars.

In the memo, SPAC emphasizes that “while some are undergoing brutal pay cuts, while layoffs are still ongoing and quality of life depends on others, at the same time, the fleet of leadership positions is being revamped.” arguing that “the existence of social justice is indispensable for the existence of social justice.”

In this context, he believes that the “new attitude” to “expenses” should affect pilots when working conditions are restored.

“If this does not happen, we will be very surprised and will be forced to believe in the hypothesis that the TAP administration either does not want to use financial surpluses to fairly replace the working conditions of workers, or there is no financial surplus and this renewal of the fleet was paid for by reducing the wages of workers,” the statement says.

TAP claims that the renewal of the fleet for the administration and managers saves 630 thousand euros annually, justifying that the decision was based on this consideration while respecting the contracts.

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“The Board wishes to clarify that TAP has a corporate fleet for administration and directors, which is in an operational ‘lease’ mode. With the option we have made, we are saving up to 630,000 euros annually if we kept the cars we have today,” TAP said in an internal statement, which Lusa had access to.

TAP justifies this by saying that 50 vehicles were at stake, for which a tender was held for the market, and six organizations were invited to participate in the Portuguese market.

“The offer with the lowest price has been selected, with a monthly income of 500 euros. For reference, other offers submitted by TAP with a more competitive cost included a monthly rent of 750 euros,” the company’s executive committee explained in a statement.

Also today, the National Union of Civil Aviation Flight Personnel (SNPVAC) said in a statement that Lusa had access to that the TAP fleet renewal causes “a lot of shame on the part of others”, given that if it is not a sign of willingness to raise crew salaries, it is “shameful » a management act.

The President of the Republic, Marcelo Rebelo de Sousa, also reacted to the news today, pointing out to the Portuguese airline a “problem of common sense”.

“I have already spoken about several public organizations in the past, about the distribution of dividends and about wages, and I understand that when you are in a difficult period, efforts must be made to set an example of containment,” Marcelo Rebelo de Sousa defended.

According to the President of the Republic, it is understandable that companies bear the costs, but he defended the need to “have common sense” when the country and the world are going through a “difficult period.”

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From taxes to wages. Six CMVM Proposals to Encourage Savings – Markets

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From taxes to wages.  Six CMVM Proposals to Encourage Savings - Markets

Taxation plays a central role in encouraging long-term savings. This is the conclusion of a study by the Securities Market Commission (CMVM) on the subject, which identifies six main measures highlighting the importance of encouraging the savings of Portuguese families who reduced and mostly stored in warehouses.

“Long-term saving plays a fundamental role in improving the financial security and well-being of individuals and families, as well as in financing companies and the economy as a whole. It is very difficult and often difficult, especially for families,” points out from a document published in World Investor Week.

That is why states encourage and support the formation of these savings, namely through tax incentives. Portugal is already including some of these exemptions in its tax system, but the regulator believes more are needed. Here are six measures:

1. Favorable taxation for the new “European NDP”.

The Pan-European Reform Product (PEPP), which came into force in March 2022 national regulation was promised government by the end of this year – is the goal of the first recommendation. The CMVM calls for the creation of a PEPP tax regime “in line with the government capitalization regime”.

This equalization will mean tax deductions for PEPP subscribers, tax exemption for PEPP investment portfolios, and more tax-friendly treatment of payments made by PEPP to its subscribers when they subsequently gain access to benefits.

2. European investment funds

With regard to European products, the CMVM is also considering European Union long-term investment funds (ELTIF), requiring that the tax treatment for collective investment bodies apply to both this product and credit funds, allowing their holders to benefit. from tax deferral on redemption or reimbursement in case of reinvestment.

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3. PPR style savings accounts

CMVM’s second proposal is to create individual retirement savings plans or accounts that are eligible for the Savings and Retirement Plan (PPR) regime. In other words, these would be accounts in which depositors could place their savings up to a certain amount, as well as buy and transact financial instruments on them.

4. Reformulation of the IRS collection

A reformulation and increase in the IRS collection deduction applied to long-term retirement savings products (depending on the various ways this can be done) is seen as necessary to encourage long-term savings.

5. Reinvestment of capital in deferred tax funds

Postponing the taxation of redemption or reimbursement of investment funds in case of reinvestment is also one of the measures. In the case of transfers between funds, the relevant taxation will only take place when the investor leaves the investment fund circuit and at rates that are all the more favorable the longer the investment in this circuit remains stable.

6. “Pair contributions”

In addition to taxes, CMVM also proposes the creation of programs to encourage long-term savings by establishing upfront commitments between companies and workers to save on future wage increases. According to the watchdog, these “coincident contributions” would allow deferral of repayments or refunds of taxes in the event of a reinvestment.

“Saving to achieve specific long-term goals allows families to increase their own funds to meet these expenses, reduce credit use, monthly efforts of families associated with a reduction in credit and the risk of default for the financial sector. “, he emphasizes.

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CMVM adds that the application of long-term savings in financial instruments tends to be advantageous because the return on savings applied to them tends to be higher than the return on other financial products such as bank deposits.

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