Portugal should not need a new financial aid program but faces major fiscal and banking sector challenges and needs to implement more measures, says an analysis of Barclays.
There are three main conditions should keep Portugal safe from new rescue: “the European Central Bank continue its program of buying assets in the near future,” the “DBRS not cut the rating” of the country “and not be” a major crisis in Italy or Spain. “
However, the Portuguese economy is deteriorating and Portugal has a” systemic banking crisis. “
” the government will have to make difficult decisions in the coming weeks “said the statement released on Monday.
He points out that Portugal needs to implement a plan to solve the problems in banking once and for all and that the government will need a credible plan for the medium term with realistic measures on the expenditure side and the revenue consistent with “financial solvency”.
the Barclays expects Portugal to end 2016 with a public deficit of 4.1%. And expects economic growth to slow to 0.7% this year and 0.3% in 2017 due to the fall in investment with uncertainty and aversion to risk environment and the high indebtedness of the private sector.
“Portugal is new under the scrutiny of the markets. the favorable macroeconomic conditions of the past 18 months are beginning to get worse,” says Barclays.
“the country is struggling with a systemic banking crisis the absence of a budget plan credible medium-term and excessive indebtedness of the public and private sectors. This raises the question whether Portugal can resolve all these issues without the help of another program. “
the Barclays It estimates that the capital requirements for CGD and BCP reach the 7.5000 MILLIONS euros, although advance that BCP may be able to finance itself on the markets, the sentiment improve.
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