This Wednesday, the Finance Minister welcomed the “very important news” that Portugal had been removed from the European Commission’s list of countries with macroeconomic imbalances, citing “very significant remedial efforts” made over the past 10 years.
“This is very important news for the country. Over the past more than 10 years, the country has made very significant efforts to correct a number of structural imbalances,” responded Joaquim Miranda Sarmento in an interview with Lusa.
On the day that the European Commission published the spring package of measures for the European semester and announced that Portugal was no longer experiencing macroeconomic imbalances, the responsible Portuguese minister justified himself: “This procedure […] closed because today we have a surplus in external accounts, we have reduced external debt, families and companies have less debt today, government accounts have reached balance, we have reduced structural unemployment, among other indicators.”
According to Joaquim Miranda Sarmento, “this is an important milestone in the country’s recovery” from the financial crisis, although “there is still a lot of work ahead.”
“The Portuguese economy has low levels of productivity and competitiveness, which means that the forecasts for all businesses without new policy measures point to growth of around 2% in the coming years and we must aim for more,” he said. governor, proposing that additional efforts be made so that “the Portuguese economy can grow by at least 3% and thus get closer not only to the European average, but also […] at the pace of direct competitors”, the cohesion countries.
Today, 10 years later, Portugal no longer has macroeconomic imbalances, the European Commission announced as part of the European Semester spring package (Europe’s annual fiscal policy coordination framework), attributing the change to “the reduction of vulnerabilities associated with high private, public and external debt, which must continue to decline.”
Portugal moved from a deficit of 0.3% of gross domestic product (GDP) in 2022 to a budget surplus of 1.2% in 2023, and public debt fell from 112.4% of GDP at the end of 2022 to 99.1% in end of 2023. .
The European Commission’s forecasts for Portugal for spring 2024 predict that Portugal’s GDP will grow by 1.7% in 2024 and 1.9% in 2025, and inflation will be 2.3% in 2024 and 1.9% in 2025 year.
Regarding the recommendations made today, the community leader asked the country to “move quickly to effectively implement” the Plan for Recovery and Resilience (PRR), given delays in implementation.
In Luse’s statements, the finance minister also acknowledged delays that he attributed to the previous government.
“Unfortunately, the PRR was shelved during the previous government. Now we are accelerating the process and, in fact, we hope that the fifth request can be made between August and September of this year,” said Joaquim Miranda Sarmento.
In an interview with Lusa today, European Commission Executive Vice President Valdis Dombrovskis indicated that the European Commission is analyzing Portugal’s request for the payment of the third and fourth PRR payments, which are currently suspended, in a review that is due to be completed. in June.
The European official also said he expected a new request for funds from the country in the summer.
“There were some delays and then partial suspensions, but it looks like things are moving forward,” said European Valdis Dombrovskis.
The Portuguese PRR amounts to €22.2 billion in grants and loans and covers 57 reforms and 284 investments.
According to the European Commission, to date Portugal has already received 6.12 billion euros in grants and 1.65 billion euros in loans, with a target implementation rate of 22%.
Author: Lusa
Source: CM Jornal
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