“Exiting the Excessive Deficit Procedure is a very important milestone for Portugal”, said the Finance Minister Mário Centeno, “as it demonstrates that Portugal’s policy strategy has placed the public accounts on a sustainable path, keeping expenditure under control, while at the same time being supportive of inclusive growth».
The European Council decided, upon the recommendation of the European Commission, to abrogate the Excessive Deficit Procedure (EDP) for Portugal.
“Coming in the wake of a growth rebound which is now above EU average; a steep reduction in unemployment, back to single digit, a methodical fixing of banks’ legacy problems, this decision also reflects structural changes in the Portuguese economy, which is now generating sustained current account surpluses”, the Minister added.
This decision is a turning point in so far as it expresses the European Union’ assessment that Portugal’s excessive fiscal deficits have been corrected in a sustainable and durable manner.
Last year, Portugal reported its lowest fiscal deficit since 1975. The primary surplus reached 2.2% of GDP, one of the highest of all EU countries. In 2017, the fiscal deficit is expected to be 1.5% of GDP, and the primary surplus 2.7%, the highest in the EU.
This decision also supports the expectation of an inflexion point in the public debt trajectory, which will allow the generation of savings without jeopardizing investment and social cohesion.
The Portuguese Government is committed to continuing the implementation of ambitious reforms, aiming at increasing potential growth and ensuring sustainable and inclusive economic prosperity.
The cautious and rigorous financial strategy will be maintained in order to preserve and to increase the gains now observed, wrote the Minister’s Cabinet in a press note.
Photo: Minister of Finance Mário Centeno with EU Comissionner Pierre Moscovici, Luxembourg, 16 june 2017 (Photo: EU)