OECD says it is unlikely that Portugal will meeting its budget deficit targets in 2013 and 2014

30 May 2013

The Organisation for Economic Cooperation and Development (OECD) has said it is “unlikely” that Portugal will be able to meet its budget deficit targets agreed for 2013 and 2014, according to the Spring edition of the “Economic Outlook”.

The document, which was issued Wednesday in Paris, outlines that Portugal’s budget deficit will this year total 6.4 percent of Gross Domestic Product (GDP) and 5.6 percent in 2014, which is higher than the targets taken on by the Portuguese government of 4.5 percent this year and 5.5 percent of GDP in 2014.

Weak economic growth and the Constitutional Court’s veto of four 2013 State Budget measures have led to a drop in tax revenues and make it “unlikely that new recently reviewed deficit targets, for 2013 and 2014, will ne met,” said the OECD.

The OECD expects Portugal’s Gross Domestic Product (GDP) to contract by 2.7 percent this year, which is higher than the government’s projection of -2.3 percent, which will be followed in 2014 by a recovery of 0.2 percent, which is lower than the figure of 0.6 percent forecast by the government.

In terms of unemployment, the OECD projects that the rate will total 18.2 percent in 2013 and increase to 18.6 percent in 2014.

Public debt as a percentage of GDP is, according to the OECD, will total 127.7 percent in 2013 and 132.1 percent in 2014. (macauhub)