IMF commends Portugal while emphasizing discipline

World
Europe

The International Monetary Fund (IMF) on Friday issued a positive assessment of Portugal's economic health, calling for further structural reform.

In its annual evaluation, the IMF said "Portugal has made notable progress over the past year in reducing uncertainty over near-term risks," but highlighted "the importance of keeping public debt on a firmly downward trajectory over the medium term."

The report went on to say that "the exit from the excessive deficit procedure this year, together with a marked improvement in stability and confidence in the banking system, have helped bolster investor confidence" and that "near-term growth outlook has also improved considerably as the ongoing recovery continues to gain momentum."

However, with the Portuguese government currently preparing its 2018 state budget, the report said that "to generate lasting fiscal savings, Portugal's policy approach would need to move from across-the-board measures to deeper structural reforms" and that "employment measures should rely on public sector restructuring to support staffing reallocation across sectors."

The report refers to the IMF's mission visit to Lisbon in June and expands upon the concluding statement issued then. Thus it confirms GDP expectations of 2.5 percent growth for 2017 and 2 percent for 2018.

Standard & Poor's on Friday became the first of the big three credit ratings agencies to lift Portugal back to investment grade, citing its improving economy and public finances.

Portugal lost the investment grade at the height of its debt crisis in January 2012

11159km

Source(s): Xinhua News Agency