Memo: Statement by the EC, ECB, and IMF on the Fifth Review Mission to Portugal

Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Lisbon during August 28-September 11 for the fifth quarterly review of Portugal’s economic programme.

The programme remains broadly on track. In 2012, despite headwinds from abroad, real GDP growth remains in line with projections, exports are performing better than expected, and the fast reduction in the external deficit is contributing to alleviating the external financing constraint. Nevertheless, higher unemployment, lower disposable incomes, and a shift in tax bases away from more highly-taxed activities are weighing on revenue collection. Against this backdrop, policy choices need to strike a balance between advancing the required fiscal adjustment and avoiding undue strains on the economy. Swift progress on structural reforms remains key to put the economy on a sustainable growth path. Maintaining broad political and social support for the revised adjustment programme will also be important.

European Commission: Memo/12/657: Statement by Vice President Rehn following the conclusion of the fifth review mission to Portugal http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/12/657&format=HTML&aged=0&language=EN&guiLanguage=en

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