IMF Cuts Portugal's Growth Forecast
30 Junho 2016 - 09:45AM
Dow Jones News
By Patricia Kowsmann
LISBON--The International Monetary Fund has cut its growth
forecast for Portugal this year, saying investment and exports have
slowed and could be further hit amid market uncertainties,
including the U.K.'s vote to leave the European Union.
In its concluding statements following a recent IMF mission to
the small Iberian country, the IMF said it now expects the economy
to grow 1% this year, down from a March projection of 1.4%.
"While private consumption continued to expand robustly,
investment and exports weakened, reflecting increased uncertainty
and a sharp downturn in some markets for Portuguese goods," the IMF
said in a statement.
"Increased market uncertainty in the context of heightened risk
aversion following the referendum in the United Kingdom could
persist for an extended period," it added.
The IMF's warning comes after Finance Minister Mario Centeno
said Wednesday that the government's 1.8% growth forecast could be
at risk given exporting markets including Angola, China and Brazil
have slowed down sharply. He also said the U.K.'s decision to leave
the EU will have an impact on the economy. The U.K. is Portugal's
fourth-largest exporting market, although analysts say the actual
volume is relatively small to have any major impact.
Mr. Centeno said despite the setback, Portugal remains on track
to lower its budget deficit to below 3% of gross domestic product
this year. The government's target is 2.2%, but the IMF said
Thursday that won't be reached unless more spending-cut measures
are taken.
Portugal is considered eurozone's most fragile economy after
Greece.
Write to Patricia Kowsmann at patricia.kowsmann@wsj.com
(END) Dow Jones Newswires
June 30, 2016 08:30 ET (12:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.