Fund argues that it would take more than 700 million euros in austerity to meet Government’s goal
The International Monetary Fund (IMF) estimates a fiscal deficit for Portugal, 2.1% in 2017, stating that it would be necessary to more than 700 million euros in austerity to reach the goal set by the Government, advocating a reform “lasting” on spending.
in A statement after the fifth mission post-programme to Portugal, which took place between November 29 and last Wednesday, the IMF analyzed the State Budget for 2017 (OE2017) and it is expected that, based on the measurements of the document, the budget deficit down to 2.1%, below the target of 1.6% predicted by the Government.
“to Achieve the Government’s objective [in 2017] would require an effort structural additional 0.4% of GDP [or roughly 700 million euros]. A consolidation effort-based reforms at the expense of lasting, it would be more favorable to economic growth than to reduce public investment,” says the team, led by Climbing Lall.
Even so, the estimates of the IMF are now more optimistic than they were in October, when the institution released the latest forecasts for the Uk, predicting that the budget deficit the Portuguese represent 3% of the Gross Domestic Product (GDP) in 2016 and 3% in 2017.
The entity headquartered in Washington, dc it is estimated now that Portugal will finish the year with a budget deficit of 2.6% of GDP, a forecast which is above the 2.5 percent required by the European Commission and the 2.4% registered in the OE2017.
Still, the IMF states that “the budgetary targets of the Government for 2016 can be achieved,” and points out that the “strong efforts” of the executive to contain the intermediate consumption, coupled with a containment of public investment, “mitigaram the impact of a significant decline in revenue provided for in the deficit.”
on the other hand, the Fund anticipate that the public debt is expected to reach 131% of GDP at the end of 2016, and to decline only slightly, to 130% of GDP, next year.
In the OE2017, the Government predicts that public debt increase of 129% of GDP in 2015 to 129,7% of GDP this year, and is estimated to resume a trajectory of reduction in 2017, for 128,3%.
Finance reiterated that it will continue “effort strict management,”
The Government has reiterated that it will continue the “effort of rigorous management of public accounts” and the promotion of the competitiveness of the economy, whereas the conclusions of the fifth mission in the post-adjustment programme demonstrate the “developments” since June.
“In 2017, the Government will continue its effort of rigorous management of public accounts and the promotion of the competitiveness of the economy, with the aim of promoting sustainable growth and inclusive growth, in a perspective of medium and long term”, reiterated the Finance Ministry in a note sent to Lusa news agency the purpose of the completion of the ‘troika’.
The Ministry of Finance pointed out these reviews on high of the IMF, stressing the “developments since the last mission,” held in June (and that they had the same predictions) that “prove the progress achieved in key areas in the national economy”.
“So, confirmed the accuracy of the budget execution of 2016 – which has led the IMF to improve its earlier forecast -they reported the positive progress in stabilising the financial sector and transmits, if the point of the situation on the implementation of the National Programme of Reforms”, highlights the ministry is supervised by Mário Centeno, noting also the “positive performance of the labour market” and the acceleration of economic growth in the third quarter.
The Ministry did not refer to the alerts of the IMF, left for the next year, that to achieve the goal of a deficit of 1.6% of GDP would be necessary in an effort structural additional 0.4% of GDP, or about 700 million euros.
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