Portugal is one of 10 countries with greater risks of fiscal consolidation

19 April 2013

Portugal is among the group of 10 countries with greater risks of fiscal consolidation, given that public debt has surpassed 90 percent of gross domestic product (GDP) and continues to rise, indicates a report from the International Monetary Fund (IMF).

The “Fiscal Monitor” report released this week by the IMF adds that Portugal should continue to maintain budget deficits above 1 percent of GDP due to the interest on public debt that it will have to pay during this period.

The report’s authors assert that Portugal, like Ireland, Spain, the United Kingdom and the United States, still has a “way to go” in terms of residual adjustment (nearly 5.5 percent of GDP on average).

In the report, the IMF includes the new budget deficit targets agreed with the team accompanying Portugal’s financial adjustment, for 2013 (-5.5 percent), 2014 (-4 percent) and 2015 (-2.5 percent). But for the other three years of the forecast it continues to predict a budget deficit above 1 percent, although with a gradual drop of several tenths each year. (macauhub)