Executive Director of the IMF to Portugal more optimistic than technical mission – Porto Canal

Lisbon, April 1 (AFP) – The executive director of the IMF for Portugal is more optimistic than the technical mission, considering that it is “unclear” why the Fund believes that the economic and fiscal performance of Portugal lead the “higher risk”.

in a statement accompanying the report of completion of the third mission of post-program monitoring, released today by the International Monetary Fund (IMF), the executive director of the Fund, Carlo Cottarelli, It mentions some indicators it considers to be positive.

Cottarelli indicates that in 2015, economic growth of Portugal continued its “gradual recovery”, accompanied by a “slight improvement in the labor market” and “adjustment external accounts. “

the head of the IMF states that” looking forward, it is expected that these positive trends continue “and that even the mission of the Fund anticipates that the 2016 growth is” to the level of 2015, “unemployment” fall over “and that the current account surplus increase.

Therefore, the Italian believes that” it is not clear why [because] these past results and expected (in the context of a decline in the budget deficit and debt even but most pessimistic projections of the mission) are seen as leading to a higher risk. “

in the report, the IMF warns of downside risks that emerge” both on the domestic side as from external sources “and points” growing concerns about the credibility of political hard-won by Portugal “- derived from” recent events in the banking sector and the risk of a reversal of reform “- are exerting” upward pressure on public funding costs “.

in addition, the Fund also warns of” further negative surprises “that may arise in the domestic economy or even through the deteriorating global outlook, considering that this may “undermine investor confidence”.

In the medium term, “a growth of lower productivity than expected due to stalled structural reforms or a disappointing growth of major trading partners” can also by sustainability public debt at risk.

the IMF expects the Portuguese economy to grow 1.4% this year (below the forecast of 1.8% of the Government) and that growth will slow slightly in 2017, to 1.3%.

As for the budget performance, the Fund anticipates a deficit of 2.9% this year (up from 2.2% projected by the executive) and estimates that this figure will keep it unchanged 2017.

// ND MSF

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