Analysts estimate that deficit will be close to 2.9% of GDP this year. S & P projects 2.7%. Government promises 2.2%. Largest creditors predict 3.2% to 3.4%. ECB economists argue revival of public investment
Portugal is in the group of 20 EU countries that this year can respect the limit of 3% of GDP deficit, refer analysts surveyed by Bloomberg, which They show an average value of 2.9%. Standard & amp; Poor “s also believes that Portugal is out of the danger zone budget (2.7% of GDP).
If this happens, will be the first time since 1995, at least, that Portugal complies with the rule- mother of the Stability Pact, although the government show difficulties in meeting other requirements, such as higher structural adjustment of 0.5 percentage points of GDP (Commission and European Council want to 0.6 this year, but the government only promises 0 , 2 to 0.3 points of adjustment) or a significant reduction in public debt, which is still close to 130% of GDP and far from the maximum of 60% defined in the treaties.
in any case, analysts appear confident as the nominal deficit this year is a point in favor of Portugal, which last year returned to miss the target:. the final 2015 deficit would be 4.3%, already incorporating state aid Banif;. or 3.1% without this effect
Croatia, Spain, France, Greece and the United Kingdom are the five EU countries that violate the Covenant in 2016. in the razor’s edge appear Finland, Romania and Poland. Portugal and 19 other respect the rule; Cyprus, Germany, Estonia and Luxembourg may have budget surpluses.
This assessment is also very favorable to Portugal as the country is the one that reduces the deficit projection face the accounts of the European Commission published in early February. In this exercise, Brussels said the Portuguese deficit would reach 3.4% later this year (IMF 3.2%), an argument to require (as has happened) additional measures, a plan B for gender caulk accounts case “downside risk” materializes.
In a more critical position are Croatia and Spain. Brussels predicts imbalances in the order of 3.9% and 3.6%, respectively. Analysts polled by Bloomberg speaking at 4.8% and 3.5%.
After weeks of doubts about the left understanding capacity, the budget was approved, providing some reassurance to markets. Along the way, the European Central Bank was to announce an even wider expansion of cheap money programs and cut directors interest rates to historic lows
The interest rate on ten-year Portuguese government debt. – which reached a peak of almost 4.5% on February 11 due to “fears” about what would think the rating agencies of a State Budget that clearly reverses measures of the adjustment program – was yesterday stabilized at 2.7% .
For Marko Mrsnik, an analyst at Standard & amp; Poor “s that follows Portugal,” the government will present a deficit of around 2.7% in 2016 “. The government says so.” The difference between our forecast and the target of 2.2% of government should be primarily to our lower projections of nominal growth. “
While keeping the Portuguese credit note in the trash, the S & P is confident that “the government will remain committed to preventing any potential significant budgetary deviation.” The place, this will have to do with a more accelerated deterioration of macroeconomic conditions or with “an impact on spending higher than budgeted some measures including the reintroduction of weekly hours from 35 hours in the public sector,” he says.
the ECB cut interest rates almost to zero, but now we need to do something with ultrabarato money. In an article published yesterday, the well selected public investment is one of the solutions. And Portugal is the most in need of it. “Since the crisis, public investment fell in many countries, particularly where there were pressured by markets,” as is the case of Portugal. Despite the budgetary corsets, the authors argue that there is need to “stimulate spending on public investment in order to increase the short-term demand and potential output.”
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