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Portugal has made progress but must keep up pace of reforms: OECD chief

Xinhua, February 7, 2017 Adjust font size:

Portugal has made significant progress and is recovering from a deep economic recession, but must keep up its pace of reforms, the head of the Organization for Economic Cooperation and Development (OECD) said on Monday.

"Portugal's reformist drive must continue. There is a lot of work to be done," OECD Secretary-General Jose Angel Gurria said at a press conference in Lisbon to present the OECD's Economic Survey together with Portugal's Minister of Finance Mario Centeno.

Gurria said Portugal still faced several challenges, including high public and private debt, fragile banking system and low productivity caused by the lack of qualified workers.

According to Gurria, Portugal had around 12 percent in bad loans, the fourth highest in the eurozone.

He called on the country to boost investment, which according to an OECD survey is 30 percent lower than the figures recorded in 2005.

The survey finds that the country's unemployment rate has dropped, but warns that it is still likely to sit at around 10 percent this year and next year.

According to the OECD, the Portuguese economy will expand by 1.2 percent this year and 1.3 percent in 2018.

Gurria said reforms were needed to boost growth, productivity and improve the well-being of Portuguese citizens.

Mario Centeno did not fully agree with the OECD's forecasts, pointing out that unemployment will decrease.

"Portugal registered throughout 2016, one of the biggest drops in unemployment in Europe, of two percentage points, with the rate sitting on the 10 percent threshold," he said, "We will manage to break the two-digit barrier."

Centeno also said at the press conference that the situation of bad loans was improving due in part to Portugal's regulatory incentives.

He noted that several financial institutions failed in their forecasts due to not understanding the government's economic policy.

The socialist government, which took office in November last year and pledged to roll back austerity, is more optimistic about its economy and has forecast growth of 1.5 percent this year and even higher growth next year. Endit