The International Monetary Fund (IMF) does not believe that Portugal will achieve a deficit of below 3% this year if the government continues to use those fiscal measures currently in place.
In the ‘World Economic Outlook’ published today in Washington, the IMF points to a Portuguese deficit of 3.2% this year and 2.8% in 2016, a big blow to the government which is relying on positive economic data to help it get re-elected.
These serious IMF assessments are well in excess of the figures being bandied about by Portugal’s Prime and Finance Ministers who point to a deficit of just 2.7% for 2015.
Few are fooled by teh government's rosy estimates as there is an election coming up this Autumn and any statistics that help the coalition parties will be trotted out to confuse and bamboozle the electorate.
If Portugal’s estimates indeed are this far adrift from reality and the deficit remains over the 3% mark as predicted by the IMF and other institutions, this will stop Portugal's government from being able to shed itself of the embarrassment of remaining in the Excessive Deficit club.
The Finance Minister Maria Luís Albuquerque will need to be studying her ‘big book of as yet unused excuses’ if she expects to maintain and credibility at home or abroad as a half percentage point error is massive when dealing with the nation's finances.
