Good pupil or otherwise, Portugal could definitely “do better” and “must try harder”, says the IMF.
In a statement released to Lusa news agency and reporting on its last mission to Portugal in March, the fund “reiterates the need for the country to cut back on public spending” – insisting on “widespread reforms of salaries and pensions” and the “continuing” of structural reforms to increase competitivity.
It “praised” progresses achieved this far but warned that “recovery underway is still too modest to raise productivity and employment” to pre-crisis levels.
Indeed while short term perspectives have “improved significantly” in Portugal, the institution led by Christine Lagarde considers that “medium-term perspectives are still shrouded by a legacy of problems”, including “weak investment, excessive business debt and a slow labour market”.
Portugal should be taking advantage of low interest rates, the depreciation of the euro, and low fuel prices to “attack remaining vulnerabilities, reconstruct financial cushions and accelerate key structural reforms”.
No mention was made over whether Brussels will accept Portugal’s bid to pay-back the remaining €7 billion of its IMF loan ahead of time.