More growth, less deficit, but still fell short of the expected. The International Monetary Fund (IMF) was in Portugal, and is more optimistic regarding the growth of Portuguese for this year and for the next, even more than the Government for 2016. In the public accounts is concerned, he says that only with additional measures the Government will be able to achieve a target deficit of 2017.
A team from the IMF was in Portugal for further assessment of the Portuguese economy in the aftermath of the rescue from 2011-2014 and was shown to be more optimistic, at least from the last numbers that was announced in October, at that time I only saw the economy grow 1% this year and 1.1% this year.
Now, the IMF expects the Portuguese economy to grow by 1.3% both this year and in the next, the good news is that the Fund says are unexpected due to the weak growth seen in recent quarters and that should mainly to an acceleration of exports in the third quarter. It is recalled that the economy grew 0.8% in the third quarter, compared to the second quarter of the year, up 1.6% compared to the same three months of last year, and that the Government only expects the economy to grow by 1.2% in the full year.
there lay already the rockets, says the IMF. For the recovery accelerated, to be sustained it is necessary that you continue to check-if growth is stronger and comprehensive in terms of sectors of the economy. That is, it is necessary to wait to see if this is really happening or if it was a quarter of stronger growth.
The team of the Fund said that the risks to the achievement of these projections are balanced. In the medium term, nothing changes, since the main obstacles for the economy to grow more and that leaves it vulnerable to shocks remain: high public debt in private and public; weaknesses in the banking sector; structural rigidities in various sectors.
for this To change, the IMF passes on the recipe of the usual: to solve the problems of the banking sector, structural reforms such as labour market that ensure that wages grow at the rate that it grows the productivity and fiscal consolidation that is long-lasting.
Deficit this year is close to…
A stud, the other on the horseshoe. The good news, according to the IMF, is that the goal of deficit this year (to 2.4% for the Government, 2.5% for the European Commission) is achievable. The technicians have reviewed the projection and now expect the deficit to stay by 2.6 percent this year, below the 3% predicted in October.
For this change, they explain, was instrumental in the efforts of the Portuguese authorities to contain the intermediate consumption and public investment, "well below the budgetary appropriations", which allowed to plug the hole in tax revenues.
Different is the conclusion to the effort of structural – that the IMF calculates differently, even without large variations in the numbers, from the European Commission, that the technicians estimate that worsens at 0.4% of GDP, that is, that there has been expansion in the budget this year.
…but it lacks 760 million euros in 2017
The same cannot be said of the target of 2017. The forecast is certainly better than the previous – 2,1% now, when in October was expected 3%, but this target fails the that the Government expects the State Budget in 2017, a deficit of 1.6%.
THE IMF says that the measures the Government has in the budget approved in the Parliament, are not worth more than a reduction of the deficit to this amount, which would make a structural adjustment of 0.1% of GDP.
The team calculates that to achieve the goal of deficit for 2017 would be the need for additional measures that were worth 760 million euros, which measures those who had a structural impact on the public accounts, that the technicians argued that they would be more friendly to growth than cuts in public investment.
Sale of the New Bank and the capital increase would help the entire banking
More a theme that has been recurring and whose warnings are already spending. The IMF says that Portuguese banks do not have enough capital to absorb losses from bad loans, the bad debt, and banks have to have an attitude more proactive to get rid of this weight, but also to cut costs and promote efficiency improvements in their structures.
For the future, say, the sale of the New Bank certainly would help the industry, but also in the capital increase of Caixa Geral de Depósitos bank and other private banks. Do this "would strengthen financial stability and enhance the environment in which they operate all the banks".
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