The International Monetary Fund (IMF) warned on Friday that “there is a real risk that the target budget deficit of 2.7% of GDP [Gross Domestic Product] not be met without further cuts in spending” and said although “it is unlikely” reverse the austerity without containing spending on wages and pensions.
In the statement on the second post-mission program, the day ending the visit to Lisbon, the IMF staff consider that “it is unlikely carry out the proposed reversal of several measures introduced during the effortless adjustment program very determined to contain the wage bill and spending on pensions”.
The technical back to warn that, despite performance of state revenues in the first four months of the year, “still uncertainty” about the extent to which this development reflects technical factors “that can be reversed in the coming months.”
The technical mission keeps forecast Officer of the Fund, “without measures to reduce primary spending [which excludes charges for public debt], the budget deficit for this year will be 3.2% of GDP”
In addition, the. staff of the institution led by Christine Lagarde notes that the stability program, which includes the government’s budgetary strategy until 2019, set “ambitious goals for reducing debt” but does not specify the measures to achieve these goals enough, and that based on “medium-term growth assumptions optimistic.”
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