IMF advocates radical reform of the State in Portugal

18 March 2015

The International Monetary Fund recommended Tuesday that the Portuguese government should carry out radical reforms to the State, as well as to salaries and pensions, according to the report by a technical mission published Tuesday.

The IMF mission that was in Portugal to prepare for the regular assessment of the country under Article IV, given to all members of the IMF, also recommended that the Portuguese government should take advantage of the favourable international climate, the euro and lower interest rates, to solve the problems of the economy.

In the statement, the technical mission said the only way to create jobs was for the economy to grow more than is currently expected, especially in exports and investment and “to make this happen structural reforms provide the biggest boost to increased competitiveness.”

Recalling that a number of structural reforms had already been launched, the IMF stressed the need to review some that were not having the expected result, as well as to complete others that were started but not completed and, in some cases, to launch further reforms to address other constraints on the Portuguese economy.

The weak euro, low interest rates resulting from the ECB’s flexible monetary policy and the low price of oil may be a unique opportunity for the government, the IMF mission said, as they are giving a “strong positive boost to the economy.” (macauhub/PT)