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Portugal Outgrows Eurozone

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Oct 2014 – theportugalnews.com

 

It might only be by 0.2 percent, but predictions that the Portuguese economy is set to record larger growth than its Eurozone partners would have been ridiculed not too long ago.

 

The International Monetary Fund (IMF) revealed its latest projections in a very detailed World Economic Outlook this week, it did confirm that the national economy should expand by one percent this year, while the Eurozone’s expected target figure was fixed at 0.8 percent.

Even greater growth in the Gross Domestic Product (GDP) is predicted for 2015, when the national economy is expected to swell by 1.5 percent, once more beating the Eurozone average which has been set at 1.3 percent.


The IMF followed Lisbon’s forecasts for unemployment, saying the figure should close at 14.2 percent at the end of the year.


The Fund said this was a “significant improvement”, especially after Portugal had been allocated an expected unemployment rate of 15.7 percent in its Spring report released in April.

 

According to the World Economic Outlook, on a national level, the Portuguese economy is set to outgrow Belgium, the Netherlands, Italy, Finland and France.

 

In related news, the IMF this week also published a Fiscal Transparency Evaluation for Portugal, which was carried out at the request of the Portuguese government by a joint team from the Fund’s Fiscal Affairs and Statistics Departments that visited Lisbon in May 2014.

 

The report recognised that Portugal had made remarkable progress since the beginning of the financial crisis and now meets most of the principles and practices set by the revised Fiscal Transparency Code at good or advanced levels.

 

“The overall positive result of the evaluation marks a significant improvement over the situation observed at the start of the adjustment programme in mid-2011”, the IMF said in a statement, and listed key positive points as being the improved quality, transparency, and comprehensiveness of information on fiscal developments.

 

Despite the progress, the report points to Portugal’s still fragile public finances, especially in terms of its still sizable negative net worth position (including employment-related pension liabilities) and overall exposure to contingent liabilities.

 

The report concludes by identifying the completion of the ongoing reform agenda as the key priority to strengthen the management of public finances and further improve transparency practices.

 
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