UTAO. Lack measures in the stability program – Observer

The government puts the deficit down by 2020, but does not present the measures it intends to achieve this goal as hopes that the austerity plan to implement to make the economy grow, says the Unit technical Budget Support (UTAO), which places once again concerned the savings that the government says it will get interest and sector cuts.

There is a new warning. The warning had been done by UTAO until other years, and was also made by the Council of Public Finance, this year and in previous years, and now back to be stressed: the government again presented results, but does not say how will the achieve.

at the heart of the discord are sectoral savings and the nominal freeze of the other current expenditure, the freezing of intermediate consumption and savings on public debt interest. In total, 3.4 billion euros of savings between 2016 and 2020 promised by the government.

“The offset such spending increases or decrease in revenue by further consolidation measures is of particular uncertainty for several reasons:. or because the latter are not sufficiently specified or because they depend on external assumptions for their implementation, “the technical

UTAO says that, in addition to no measures materialize how the Government intends to make these savings in the case of intermediate consumption and other current expenditure, it is also expected that there are pressures to this expense increase at the end of several years of contraction.

in the case of reduction in interest expenditure, the second largest block of the expenditure side of savings and the third largest in total, UTAO warns that this expectation is telling that the conditions in the markets improve over the years, and this is one of the results that does not depend on direct Government action.

with regard to economic growth, UTAO places also concerned the realization of projections that the government puts in the stability program and points out that the main partners commercials Portugal are struggling. Angola and Brazil, important markets for Portuguese exports, are facing a recession that may worsen. China is growing less, there are fears that the euro zone economy will grow less, that the slowdown in the Spanish economy is even greater and that Germany’s growth is moderate. All these effects would have a negative effect on the Portuguese economy.

Finally, UTAO into question the combination of factors. The Government says it will apply a set of restrictive measures over the years and hopes, therefore, a double positive result in deficit accounts, meaning that these first order effects (direct impact of the measures on the revenue and expenditure) and second order (impact on the budget balance that these measures have on economic growth) help reduce the deficit

However, technicians warn that these positive results -. to help reduce the deficit and to grow the economy, although the measures are restrictive. – are “a virtuous and diverse combination of which would be generally expected”

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