LISBON, March 25 Reuters Portugal swung to a strongerthanexpected budget surplus of 1.2 of GDP last year from a deficit in 2022, official data showed on Monday, the last day of the Socialist government39;s eightyear rule in which it posted annual surpluses twice.

As part of the country39;s excessive deficit procedure reported to Brussels, the National Statistics Institute INE also said that Portugal was expected to end this year with a surplus of 0.2 of gross domestic product.

Beefed up by higher tax revenues due to the inflation effect and strong jobs creation, the surplus Portugal39;s strongest in its 50 years of democracy reached nearly 3.2 billion euros 3.46 billion last year. Revenue rose 9 and expenditure 5.2, the INE said.

The fiscally prudent government, which was due to hold its last cabinet meeting on Monday before a new administration takes over after a March 10 election, had predicted a surplus of 0.8 of GDP in 2023 following a budget gap of 0.3 the previous year.

Bank of Portugal Governor Mario Centeno on Friday warned that the country should preserve surpluses stemming from economic growth, which the institution put at 2 this year, and not consume in the present.

Prime ministerdesignate and the leader of the centreright Democratic Alliance, Luis Montenegro, has promised tax cuts for companies and individuals, as well as pay hikes for teachers, police and pensioners.

Although some permanent expenses are expected to increase, there is some scope for…