IMF Projects Portuguese Deficit of 5% of GDP This Year Followed By Drop to 1.9% in 2022

IMF projects Portuguese deficit of 5% of GDP this year, followed by drop to 1.9% in 2022.

The International Monetary Fund (IMF) projects that Portugal will reach a deficit of 5% of GDP this year, above the 2.7% of GDP forecast in October. The Bretton Woods institution also sees Portugal complying with Brussels’ budgetary discipline rules if they were already active in 2022, as it predicts a deficit of 1.9% of GDP for next year.

The data appear in the IMF database, updated this Tuesday afternoon, which also reveal a slight pessimism for next year compared to October, when it projected that the Portuguese budget balance would reach 1.6% in 2022.

Despite still expecting a deficit in 2023 (-1.38%), the institution chaired by Kristalina Georgieva sees Portugal returning to surpluses in 2024. According to estimates, that year, Portugal should have a positive budget balance of 0.52% of the GDP, which is expected to decrease to 0.28% in 2025.

Regarding the weight of public debt, it projects that it will reach 131.4% of GDP this year, dropping to 125.6% in 2022, continuing the downward trend, returning to pre-pandemic levels in 2024, when it should reach 117.6% .

This Wednesday, the IMF publishes the “Fiscal Monitor”, in which it analyzes the global budgetary scenario and the policies adopted by the countries.

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