The impact of COVID-19 on the financial sustainability of the municipalities of the district of Braga

The financial sustainability of organizations, whether public or private, has become an increasingly relevant issue in the context of the 2030 Agenda and the Sustainable Development Goals (SDGs). This study aims to present preliminary results on the impact of the COVID-19 pandemic on the financial sustainability of municipalities and to analyze which contextual factors may determine this impact. Following a qualitative methodology, a documentary analysis was carried out of the management reports of the 14 municipalities belonging to the district of Braga, in the period between 2018 and 2021. The results show that the financial sustainability of the municipalities was affected by the COVID-19 pandemic crisis, particularly in terms of debt, which increased significantly during the pandemic, and the decrease in tax revenue. On the other hand, financial autonomy improved during the period in question, due to the transfers and capital subsidies obtained from the state to deal with the pandemic. These impacts were felt more acutely in small and medium-sized municipalities. Political competition also proved to be a variable with a significant influence on the financial sustainability of municipalities. The aim of this study is to understand the lessons learned during this period in order to apply them to possible future crises, supporting politicians and managers in managing their organizations in crisis contexts.