Arrival at DBRS in August to assume an important position in the definition of the ratings assigned to the european countries, Nichola James explains why it is that the agency continues to be the only one to not put the Portuguese debt to a-level "garbage". The analyst laments, however, that, in the OE 2017, the option does not have been betting on most measures of permanent reduction of expenditure.
Met with the leaders of the Portuguese Government this week. This meeting was very important for this decision?
Well, it was considered useful that the Government have given us additional guarantees with respect to its commitment to the objectives of budgetary consolidation. In addition, they offered us also the explanations quite useful in relation to what has been the performance of the economy during this year. Were also important details that we have collected about the current situation of the banking sector, after the decisions that were made.
And were convinced in relation to the reasons why the economy slowed down?
The Government has been very emphatic on the idea that there are specific events that are affecting the growth. In the first place, the growth lowest in Angola. Later, the negative impact of the delays in the production of Autoeuropa and Galp.
And for the deficit, already consider that the goal of the deficit is already credible?
our feeling is that the budget deficit will stay below 3% of GDP.
But not below 2.5% required by Europe?
We have our hands on the data of budgetary execution until September, and the truth is that they are in line with what are the budget goals. It is true that there may be pressures on the expenditure side with the approach of the end of the year, but we think that, if the target deficit of 2.5% is not reached, the Government will be there near, certainly on a value situated between 2.5% and 3%.
Were satisfied with the way the Government intends to reduce the deficit in the State Budget in 2017? Are the measures that they took?
I don’t like to give advice of specific policies. What I can say is that we were able to see that there is an effort, but we liked that there were more measures of spending cuts permanent. Because this way, the budgetary consolidation would be more sustainable. What we do not want to see is the public debt ratio rises again to a value above 130% of GDP.
Consider the forecast of growth of economy of the Government of 1.5% in 2017 credible?
We are working on the basis of a growth of 1.5%. It is certain that there are still many uncertainties, especially with regard to the international situation. But this value is already much lower than the 1.8% that were previously provided.
A negative decision is yours in relation to the rating of the Portuguese would have a very significant impact on the markets. This fact has influenced them in some way?
No. Our ratings are determined in a way completely independent. They are not determined by any entity, or external factors, or even the eligibility of the debt from the ECB.