Implementation of EU bazooka funds ‘crucial’ for Portugal in medium term

  • Lusa
  • 21 October 2021

The International Monetary Fund (IMF) said that the implementation of the European recovery fund "will be crucial" in Portugal, increasing growth and productivity in the medium term.

The director of the European Department of the International Monetary Fund (IMF), Alfred Kammer, said Wednesday that the implementation of the European recovery fund “will be crucial” in Portugal, increasing growth and productivity in the medium term.

In the medium term, “Portugal is immensely helped by the NextGen EU” since besides fostering growth and productivity, it will also do so with “investments in the ‘green’ transition and digitalisation of the economy”, as well as “through the structural reforms that the Government has implemented”.

“It will be an important part for the response to the crisis next year, but also very important in the medium term,” he reiterated.

Asked about the different IMF and Government forecasts for the Portuguese economy – the IMF predicts growth of 4.4% this year and 5.1% next year, the Government 4.8% and 5.5%, respectively – he said:

“What we see all over Europe is a lot of uncertainty about projections and forecasts. So I’m not surprised that Portugal is one of many countries where we have slightly different forecasts,” Alfred Kammer also noted the “different types of data” taken into account for the assessments.

The IMF believes that the Portuguese economy “has responded to the measures underway and is going from a response to a strong recovery from the second half of this year, continuing into 2022.

In terms of the labour market, the director said that IMF studies point to a release of labour in low-skill sectors such as tourism, a sector in which “Portugal has much of its economy invested” and that was “hit particularly hard.