Council of Public Finance devastates macro Government scenario – Express

For the Council of Public Finance (CFP), optimism sin logo for excess in growth forecasts for the Portuguese economy during the year 2016 skewing the entire scenario projected by 2020.

“The estimate the Ministry of Finance for real GDP growth in 2016 (1.8%) is above the projections of the main official institutions (between 1.4% and 1.7%). This differential is due to more moderate projections for private consumption and investment (GFCF) by all the institutions, “reads the opinion of the Council of Public Finance for macroeconomic forecasts underlying the stability program 2016-2020.

the opinion of the Public Finance Council monitors the stability program that the Government should present in Brussels.

“the Ministry of Finance has not reviewed the macroeconomic scenario in 2016 compared to the June Budget the state, despite the information currently available to recommend the revision of this projection. One would expect an estimate of the adjustment for 2016, not only the most current incorporation of information time and leading indicators series of economic environment, but also due to the publication of the National Accounts for the year 2015, to present some different values ​​than expected the Ministry of Finance on / 2016 imply a different dynamic for the current year, “the opinion.

since there was no revision of the macroeconomic scenario in 2016, the risks already identified in recent weeks by Public Finance Council remain valid. “Larger then identified risks were assessed on the role expected growth in private consumption as a driver of the economy in the medium term and the effects of uncertainty about the evolution of the international environment,” insists this independent body.

The opinion ends with these six conclusions, weaving various alerts and repairs to the Government:

1. on the statements included in this scenario for the year 2016 the CFP has already ruled on January 21 and March 1, 2016. the data not only confirm later known as reinforcing then the risks mentioned.
2. the composition of the growth of aggregate demand from 2017, based on the dynamism of investment and exports, to materialize, it would appear himself to more suitable for the Portuguese economy.
3. for the entire forecast period, the CFP highlights the risks that focus on cautious assumptions on the evolution of foreign demand and export growth in the medium term and the reasons for the dynamics of investment.
4. in addition, the instability around the Portuguese financial system is a real risk to the achievement of the analyzed macroeconomic scenario.
5. the risks outlined have consequences for all the variables of the macroeconomic scenario, which may involve the review of the results expected for the fiscal targets. The set of forecasts for the period 2017-2020 presents a higher risk of non-performance.
6. The perception of risks associated with forecasts can be mitigated by the articulation between the macroeconomic scenario of the stability program and the other instruments economic policy to substantiate the continuation of structural reforms that the Portuguese economy still lacks. This articulation is especially relevant when it comes to a document that should establish the stance of fiscal policy for the period of a parliamentary term. However, the Government has submitted to the Council of Public Finance information to allow taking it into account.

By coincidence or not, the Stability Programme which is available on the Government website does not include the opinion of the Public Finance Council shall be referred to the document to Brussels.

As you can see on the last page of the stability program is not in anything quite critical opinion of the Council of Public Finance.