IMF asks the next government more austerity, reforms and caution in tax descent – Jornal de Negócios – Portugal

IMF calls on the next government more austerity, reforms and caution in tax descent

With the Greek volcano only asleep, keep in Lisbon policies “credible “it is” essential to ensure favorable financing conditions “for the state and the economy. Protect the country from being dragged into a possible new wave of turbulence in bond markets should be the new government’s priority, says the IMF.

The second post-program evaluation was used the International Monetary Fund (IMF) to make a list of warnings intended to whoever government after the elections of 4 October.

In the report, released on Thursday, August 6, the IMF points out that the next government should be aware that the “potential of prolonged turbulence associated markets to developments in Greece remains the highest risk exceptional “in the horizon of Portugal. With the Greek volcano only asleep, it is crucial to ensure that investors maintain their confidence in the direction of economic policies, says. “Maintaining the credibility of policies will be essential to ensure favorable financing conditions,” repeated the IMF, to draw attention to the high weight of public debt (127% of GDP) and its “highly vulnerable” to shocks “plausible”.

In practice, says the Fund, this means that the next executive should take advantage of the combination of economic recovery – remains predicting growth of 1.6% this year and 1.5% next – with the opening of a new political cycle to push through more reforms in the economy and the state, particularly in order to contain costs in the health and pensions, and ensure that you make are not undone, particularly in sector energy, where the IMF seems to have major concerns about the power of lobbies.

“greater fiscal adjustment to further reduce the vulnerabilities of high public debt is needed, particularly given the increased risk of turmoil in financial markets, “

It will be essential to recover the momentum of structural reforms when the newly elected government is formed.

International Monetary Fund

write the body chaired by Christine Lagarde (pictured), who returns to doubt the ability to be reaching the deficit target this year (2.7%) and next.

“It will be essential to recover the momentum of structural reforms when the newly elected government is formed. The current economic recovery associated with the beginning of a new political cycle presents a favorable opportunity to advance reforms, particularly in the areas of labor market and public sector reform “, namely to contain costs in the health and pensions, he added.

“It is also crucial to ensure that the product market reforms introduced in recent years to be fully implemented as intended to achieve concrete results on the ground.” In this context, the IMF also stresses the importance of “difficult reforms, namely to contain the increase in energy costs, are not reversed. “

Get off IRS and IRC? Only if and when bank

The institution based in Washignton, which lent the country a third of the rescue completed a year ago, also warns the next government to be careful with what it promises and concrete in terms of tax cuts. “The authorities must act with caution in the reversal of the main measures adopted in recent years on the revenue side. Lower revenue than expected or insufficient adjustment in spending [that threaten the budgetary targets] would require postpone or cancel partially phasing proposal for the IRS surcharge, extraordinary contributions thirst for energy and natural gas, and a tax reform heritage “.

The IMF writes although also the gradual reduction of corporate tax rates, the IRC,” will have to be carefully assessed each year to avoid revenue shortfalls. “