Warning. Government projections are at risk of failing – Daily News – Lisbon

Board of Public Finance said that measures which the NRP are not accounted for in the stability program

The alert it is not new. When analyzed the macroeconomic projections of the State Budget, the Council of Public Finance (CFP) has listed a number of risks that could lead to the failure to achieve the expected goals. Now in its opinion to the Stability program (SP), approved yesterday by the government, the body headed by Teodora Cardoso said that the risks were reinforced and may even be necessary to review the scenario.

“About forecasts included in this scenario for the year 2016 the CFP has already ruled on 21 January to 1 March. the data not only confirm later known as reinforce the risks so marked, “says the new report. These observations stem from the fact that the government has decided to maintain the 2016 scenario contained in the unaltered state budget, a decision that the strange Board of Public Finance, taking into account that “information currently available to recommend the revision of this projection.”

But the risks of the targets not being achieved are not limited to 2016, accompanying the horizon of the projections (ranging up to 2020), being even stronger. Contributing to the fears of the Board of Public Finance is the foundation for the dynamics of investment, prudence around the evolution of external demand and export growth in the medium term and instability around the financial system “is a rosco not inconsiderable to achieve “the macroeconomic scenario.

in addition, the scenario of the stability program does not contain the effects of other economic policy measures, in addition to those of OE. Which means that the projections do not include, for example, the impact of measures of the National Reform Programme.

“As the CFP has been warning, in assessing the macroeconomic scenario underlying the stability programs, is indispensable analysis of interdependence – in diagnoses, strategies and impacts. – fiscal policy and other public policies in the broader context of economic policy the lack of consideration of these measures makes it difficult to understand the trajectory presented to the scenario in PE 2016 “stresses the document.

at issue is, for example, the indexing update social support that the government wants to make 2017 onwards, serving IAS reference to various social support (eg the pensions and unemployment benefits) and to tax deductions, eventually have an effect on public accounts. The intention to keep active pension update mechanism is also not recorded.

Mario Centeno provides that the public deficit reduces this year to 2.2% and to 1.4% in 2017, which implies an additional adjustment of 1.4 billion euros. And it expects the economy to grow 1.8% this year and next. For the CFP, the risks may lead to a revision of the results expected for the fiscal targets. The body chaired by Teodora Cardoso stresses, however, that the risks associated with forecasts can be mitigated if a link between the predictions of the stability program and the continuation of structural reforms that the country still needs to do is done. “This joint 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 submitted to the Council of Public Finance information to allow taking it into account,” says the seem. On Thursday, at the press conference after the Council of Ministers approved the document, Mário Centeno said the macroeconomic scenario is “prudent”. The Stability Programme and National Reform Programme are discussed in Parliament on Tuesday.