Portuguese Ministry of Finance regards as “odd” – but accepts – some of Brussel’s predictions

  • ECO News
  • 10 November 2016

In a press release, Mário Centeno’s office states: “the methodology used by the European Commission for the 2016 deficit 2.7% GDP prediction remains unclear”.

The Ministry of Finance accepts, but regards some as “odd”, the predictions made by the European Commission, revealed this Wednesday, in Brussels.

In a press release sent to the Portuguese editorial offices, the Ministry of Finance stated forecasts confirm Portugal should leave the Excessive Deficit Procedure in 2016, but then adds they “accept, although oddly, some of the said predictions”.

“The methodology used by the European Commission for the 2016 deficit 2.7% GDP prediction remains unclear”, says the press release.

“This prediction is identical to the one made six months ago, although the data on fiscal execution, which is public and subject to scrutiny, point to a 2.4% GDP deficit in 2016 – the lowest in 40 years”, is also stated in the press release. The goal set by the European Commission for this years’ deficit is 2.5%, meaning the current prediction made by Brussels implies the failure of this goal, as for the government’s represents a better result than the goal.

According to the Ministry, Brussels recognizes the “remarkable improvement of the labor market” and “acknowledges the excellent performance of tourism in 2016”. However, they also mention the shy growth in exports, “which does not correspond to the last data available”, as emphasized.

During the press conference of autumn predictions’ presentation, the commissioner for Economic and Financial Affairs Pierre Moscovici recognized the importance of having discussed different points of view with national authorities. However, he referred his opinion about the Portuguese data to upcoming week.

After the Portuguese government sent the 2017 State Budget draft to Brussels, the Commission asked for further information and warned that with the measures and information held in the documents, the implied structural adjustments for the next year will be close to zero and, therefore, insufficient (the goal is 0.6 percentage points). Nonetheless, over the last few days Brussels had already confirmed the Portuguese document is in compliance with European rulings.