IMF. Portugal with a deficit of 3% this year – the Observer

The International Monetary Fund (IMF) maintained its forecast of a deficit of 3% for Portugal this year and next in light of what he had made known two weeks ago, and worsens in one-tenth of its forecast in the long term in a tenth. The debt will continue to decline, but at a slower rate.

Portugal may still be far from meet the goal of deficit agreed with the Council of the European Union and even lower the deficit to less than 3%, both in this and in the next, this in the eyes of the IMF, in the update of the Fiscal Monitor, the IMF report that assesses the fiscal situation of the different countries, by which the Department led by ex-Finance minister of the previous Government, Vítor Gaspar, is responsible.

The Finance ministers of the European Union agreed in early August to give a year to Portugal to reduce the deficit to less than 3% and stipulated a new goal for the Government to comply. The goal, of 2.5% of GDP, it is even more benevolent that the goal of the Government itself in the State Budget for 2016, known in February, up 2.2%, but yet the IMF continues to believe in the accounts of the Government.

The numbers are worsened by 2021 in the face of what was designed in April, at which time he published for the last time, the Fiscal Monitor, all in a tenth. That is, the Fund expects that the deficit will download at a maximum of a tenth of a 2017 to 2018, but if you keep in 2.9% of GDP by the end of 2021.

The forecasts in the longer term are, of course, surrounded by huge uncertainty, due not only to the inability to predict, especially as long-term, the economic conditions, but also because they do not take into account any policy measures that have not already been taken.

Debt to go down less, but to go down

Still with large uncertainty in relation to what will happen at the end of the year, due in particular to the operation of the capitalization of the cgd (when it will be done and how it will be treated in terms of public accounts), the Fund reviews the level that you expect the public debt at the end of this year only a tenth and for the better, of 128,5% to 128,4% of GDP, compared to what was expected two weeks ago. The numbers for the next year remain.

As compared with the data that was announced in April, with annual forecasts until 2021, the IMF now points to a reduction of the public debt, less intense. Before, the Fund pointed out that Portugal got to the final of the legislature with a debt in the 125,6% of GDP. Now expects that the debt continue to go down, but that does not pass the 127% at that time (2019), 1.4 percentage points of GDP.