Economic figures 'not bad news'

By TPN/Lusa, in News · 07-12-2019 18:00:00 · 0 Comments

The Portuguese growth figures in the context of a slowing world economy "is not bad news," but neither is it "excellent news," former Portuguese minister Álvaro Santos Pereira said, pointing out that debt reduction should be "number one priority.

"The Portuguese economy is growing at 1.9% this year and 1.8% for the year [as a whole] is not too bad, but it is also not fantastic, so it is important to say that there are other countries in Eastern Europe and the Baltics growing 3 or 4%. [...] It's not excellent news, but it's not bad news," said Álvaro Santos Pereira, current director of the OECD country studies department, in a statement to the Lusa agency.

In the presentation of the report with the world economic forecasts released today by the Organization for Economic Cooperation and Development (OECD) in Paris, the former minister contextualized the projections for Portugal as growth of 1.9% and a zero deficit in 2020.

"We are talking about a general reduction in the growth rate in Europe, but also in the United States that will happen next year and then also in Asia. A world economy that should be growing by 4%, which is the forward speed, and this year will be growing by 2.9%", said the economist, referring that these are the worst global figures presented by the OECD since the financial crisis.

Portugal’s priority, according to Santos Pereira, is to reduce debt. "Debt reduction must be the total priority for Portugal. We still have a public debt of around 120% [...] If there is a greater slowdown in the world economy or a recession, or if we have a crisis, we will be too vulnerable," said the former minister.

Even exports, which the OECD considers in its report are supporting Portugal's positive figures, should be improved: "An economy like Portugal’s, instead of exporting 45%, should be exporting 80 to 90% as is the case in the Czech Republic or in Belgium and other countries of our population size", he stressed.

Asked about the increase in the minimum wage, and with the OECD considering in its report that wages in Portugal are low, Álvaro Santos Pereira said that the most important thing is to create conditions for the average national wage to rise.

"More than the minimum wage, which is low and has to be increased gradually, it is important to create the conditions for average wages to begin to rise. What we know is that two thirds of our population earns less than 1,000 euros per month and, therefore, we need to increase the living standards of the Portuguese", said the OECD representative.

The OECD has improved the forecast for the Portuguese deficit to 0.1% this year and 'zero deficit' next year, in line with the government, by a tenth, to 1.8%, the estimate for economic growth in 2020.

In the report with the world economic forecasts released today ("Economic Outlook"), the OECD improved its forecast for Portugal's budget deficit this year to 0.1%, compared to the deficit of 0.5% anticipated in its previous forecast in May.

For next year, the OECD now anticipates a zero budget balance (0%), an improvement of two tenths compared to the previous estimate (deficit of 0.2%).


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