Pierre Moscovici sees some important imbalances, namely the high level of external debt, both public and private, and vulnerabilities in the banking sector and segmentation of the labor market.
The European Commissioner for Economic and Monetary Affairs, Pierre Moscovici, believes the Portuguese economy continues moving in “the right direction”, but warned against the imbalances that are left to be corrected in the country by means of implementing reforms.
“Portugal, as we all know, is growing robustly, its public finance are improving and unemployment is decreasing at a constant pace. In March, we concluded that Portugal is no longer experiencing excessive macroeconomic imbalances. Nonetheless, the country continues to face important sources of imbalances, such as high external debt, both private and public, vulnerabilities in the banking sector and a segmentation of the labor market”, Moscovici stated.
Moscovici, who spoke about Portugal in the press conference presenting the European Semester 2018 Spring Package, underlined that Portugal “must consolidate the most recent positive tendencies in reducing the deficit and debt, and we advise the country to assure the nominal growth rate for primary net public expenses does not surpass 0.7% in 2018, which corresponds to an annual structural adjustment of 0.6% of GDP”.
"Portugal continues to face important sources of imbalances, such as high external debt, both private and public, vulnerabilities in the banking sector and a segmentation of the labor market. ”
According to the commissioner, that can be achieved by reinforcing the control of expenses and assuring a more efficient public expense, namely on health care.
Lastly, Pierre Moscovici commented that, due to the fact that reforms take time, “it’s only natural that some commitments are not yet implemented”, but he acknowledged that “in other cases, the Commission is worried about the rhythm of progress”.
“Bottom line is: things are moving in the right direction, but some imbalance still need to be corrected by the pursuit of efforts in reforms”, Moscovici concluded about Portugal.