The International Monetary Fund predicts an even more gloomy deficit figure for Portugal than Brussels, a painfully high 3.4% of GDP by the end of 2015.
Brussels is going for a 3% deficit for Portugal next year and rejects the government's prediction of an over-optimistic 2.7%.
The Brussels figure discredits the Government's forecasts for 2015 and today the IMF followed with a comment that the deficit will be "markedly superior" to the figure from Passos Coelho’s team as contained in the 2015 State Budget.
This prediction is the result of the first evaluation by the IMF of the Portuguese economy since the end of the financial assistance programme.
At the heart of the variance are "more conservative assumptions on macroeconomic projections and revenue."
Brussels and the IMF expect a more modest economic growth rate and do not believe that Portugal’s Tax Authority will be able rake in the high figure in taxes that it needs to make the books balance.
Both agree that public debt should begin to recede in the second half of 2015, but predict that the eventual figure still will be above Portugal’s own forecast.
The IMF states that Portugal’s borrowing will represent 125.7% of GDP, a figure that surpasses that of the European Commission which is going for 125.1%, both higher than Passos Coelho’s voter-friendly figure of 123.7% of GDP.
Among the concerns expressed by the IMF are constraints to export growth and the competitiveness of businesses, and the excessive debt being carried by Portugal’s companies.
The IMF regrets also that the process of ‘fiscal consolidation’ is predicted to tread water next year as it wants the adoption of such budgetary adjustments that are necessary to reduce the public debt to 'sustainable levels.'
Portugal’s own Public Finance Board says there are risks in achieving the government's budgetary target for next year and that a full 40% of the fiscal consolidation measures are ‘not well specified’ in the 2015 State Budget.
The Board adds that overly optimistic economic forecasts, projections of revenues that are highly dependent on consumption and the absence of estimates of the gains from the fight against tax evasion all create weaknesses and risks in the proposed State Budget as submitted by the Government.
It seems then that the 2015 State Budget is indeed one that has been tainted by the prospect of an election for which Passos Coelho needs to persuade the country that all is well under his command.
Comments
Neither of them - like Greece and others - have made any attempt to 'work' with the EU in the decades they have been in it.
Portugal has been running with a particularly nasty trick, like Cyprus is / was, on the British. Cypriots telling the Brits - we were British Crown Territory until not long ago.
Portugal luring us with the nonsensical alliance with Britain ... yet both far more interested in British money than the Briton who foolishly brought it to them !!!
Portugal's grasp of EU Treaties and their implications - like the recent Lisbon one - is classically shown by their understanding of the original alliance with England - the 1386 Treaty of Windsor.
To the English it meant mutual defence of each other from an aggressor. England proving several times its part in protecting Portugal from Spain.
Portugal ?? 200 years after signing this mutual defence pact with England it was attacking England with thousands of soldiers and sailors in the Armada !!
Can anyone take the Portuguese seriously ??
No, the truth is that Peter Rabbit is not totally in control of his own country. He is being forced by outside forces to make decisions he does not like, and is probably protecting Portugal by procrastination. In fact he probably wants to leave all the really nasty decisions to his successor. It may be that he hopes to lose the next election.