LISBON: Portugal is riding the wave of the eurozone recovery with a pickup in investment and expanding exports that are expected to lift growth by 2.5 per cent this year, the former bailout country’s best performance for more than two decades, the International Monetary Fund said.
In its latest post-bailout review, the IMF sounded an upbeat note, saying the “near-term outlook has strengthened considerably” and praising “commendable progress in addressing near-term risks”.
Unemployment also dropped further, falling to 9.4 per cent in May, the lowest level since 2008, the National Statistics Institute said on Friday. However, the youth jobless rate (for 15-24-year-olds), which has been increasing for two months, rose to 24.6 per cent in May.
The IMF said the upturn in growth made this year’s fiscal deficit target of 1.5 per cent of gross domestic product “well within reach” after “strong efforts to contain spending” saw the deficit drop to an historic low last year.
Portugal was on track for a fourth consecutive year of near-double digit growth in tourism revenue, the Fund added, with investment in the sector supporting “a marked rebound” in the construction industry. The “robust euro area recovery” was also boosting a “broad-based pickup in exports”.
The IMF commended Portugal for making “notable progress over the past year to stabilise the banking system” but warned that the country still needed to address the sector’s large stock of non-performing loans and deal with high levels of corporate debt.
Portugal’s anti-austerity Socialist government said the IMF’s findings reflected “a structural change” that was underway in the economy.
