Portuguese Government hopes to return 7.2 billion to the IMF between 2018 and 2019

The Portuguese Government forecasts the anticipation of a 7.2 billion euros payment to the International Monetary Fund (IMF) in 2018 and 2019, stated UTAO (Technical Unit for Budget Support) this Wednesday.

The Portuguese news agency Lusa had access to a monthly report in which experts mention that considering the last presentation made to investors from the IGCP, the Portuguese Treasury and Debt Management Agency, the Government predicts an anticipation of the IMF payment “of 6.5 billion in 2018 and at least 700 million in 2019”, totaling 7.2 billion euros. Before any forecast, Portugal was supposed to start repaying its debt the IMF only in 2019: it should pay 2.5 billion euros in 2019, 4.9 billion in 2020 and 4.3 billion euros in 2021.

UTAO has concluded the updated information from the IGCP means that “implicitly, the forecast is to have an anticipated repayment of 6.5 billion euros in 2018 and at least 700 million in 2019”, totaling 7.2 billion euros in 2018 and 2019. There is no early repayment predicted for 2020 and in 2021 the IGCP hopes to repay the IMF two billion euros.

Since Portugal started repaying part of the credit granted by the IMF before its maturity, in 2015, more than 14,500 million euros have been reimbursed out of a total of 26 billion euros granted to Portugal in 2011.

The early repayment of the loan granted by the IMF allows cost savings for the Portuguese State, because this credit has very high interest rates. However, both the IMF and the European Stability Mechanism (ESM) have to approve these early repayments. Ricardo Mourinho Félix, the State undersecretary and Finance secretary, in an interview to CNBC, stated that the Government is discussing an anticipated reimbursement to the IMF with the ESM, although he did not disclose the amount at issue or the date predicted for that repayment.