The International Monetary Fund (IMF) warning that Portugal may return to lose access to markets if it doesn’t make significant reforms, thus raising the specter of a new rescue.
"Low growth, the absence of the reform of the public expenditure and banks are fragile, it may lead to a loss of market access, even in the face of small shocks," reads the report of the fourth assessment post-program Portugal, released this Thursday.
THE IMF has no doubts that "even in the absence of any immediate challenge, the failure to address these weaknesses can put you on a trajectory of medium-term unsustainable and leaves the country vulnerable to shocks".
Echoing many of the criticisms and recommendations made by the Uk since the end of the program of "adjustment", today’s report points to three major "weaknesses" in the country: the financial system, which is faced with high level of non-performing loans, public finances and the macroeconomic scenario".
"any Problems that arise in any of these areas may produce impacts in the other, leading potentially to a spiral effect", warns the IMF.
After pointing out that Portugal has been able to finance in the market due to the monetary policy of the ECB, the institution presided over by Christine Lagarde draws attention to the fact that interest rates continue to remain low because of the perception that the central bank will extend its program of stimulus.
in This sense, the Portuguese government will "further strengthen the framework for macroeconomic policy to ensure a sustainable access to finance so that monetary policy is normalized".
The Fund expresses its concern at the reaction of markets to a possible deterioration of the dynamics of the public debt. "Any development that worsens the dynamics of public debt can trigger a sudden change in market sentiment
"there May be slippage in the budgetary result of the reversal of some measures or a macrochoque, or accounting major liabilities, including the financial system", says the report, which also points out the negative impact on the spiral that one might expect a downward revision of the forecasts of the main macroeconomic indicators.
The economy continued the slowdown started from the second half of 2015, and without new measures the deficit targets may not be met, warn the technicians from the IMF, which maintains the forecast of a growth of 1% this year, with the government deficit estimated at 3% of GDP.
(News updated with information from the ECB and public debt)