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Portugal only to bring down budget deficit to below 3 pct in 2018: IMF

Xinhua, January 31, 2015 Adjust font size:

Portugal will only be able to bring down its budget deficit to below 3 percent in 2018 if it implements further austerity measures, the International Monetary Fund (IMF) warned on Friday, according to local media.

The IMF said that Portugal's public deficit will reach 3.4 percent of GDP this year and 3.3 percent of GDP in 2016.

This came after Portugal's Prime Minister Pedro Passos Coelho said at a fortnightly debate at parliament the same day that the country could reach its target of below 3 percent this year.

The Portuguese government had agreed with the troika of international lenders -- the Europen Commission, the IMF and the European Central Bank -- that the budget deficit would not surpass 2.5 percent of GDP in 2015, slightly above the previous budget target agreed with the European Union.

Portugal saw its economy start to grow for the first time last year since the country was bailed out in 2011.

That program ended in May last year but the troika have insisted that the country must not slack in its pace of reforms.

While the prime minister expects to reduce the public debt to 123.7 percent of GDP this year, the IMF believes this target is only realistic in four years time, in 2019. Endit