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04May14

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IMF praises Portugal's fiscal, economic reform

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International Monetary Fund (IMF) Managing Director Christine Lagarde spoke highly of Portuguese government's efforts to consolidate fiscal order and implement structural reforms on Sunday, as the country has decided to end the bailout program by the international lender.

"The Portuguese authorities have established a strong track record of policy implementation to address the country' s long-standing structural problems. This bodes well as Portugal exits its EU/IMF-supported program," Lagarde said in a statement.

"Although uncertainties and challenges remain, Portugal is now in a strong position to complete the consolidation of public finances and further deepen structural reforms, which will be essential to achieve sustainable growth and job creation," she said.

Portuguese Prime Minister Pedro Passos Coelho announced Sunday that the debt-laden country saw an end to the bailout program with the international lenders, namely the European Central Bank, the International Monetary Fund and the European Commission, without applying for a precautionary credit line and restoring complete sovereignty over financing in the world market.

Portugal's economy showed early sign of recovery since the second half of last year after the country signed a 78-billion-euro (108 billion U.S. dollars) bailout program in May 2011 with the international lenders. ' The Portuguese government has been implementing harsh austerity measures to meet the deficit target set by the lenders. The Portuguese government estimated the country's economy to grow 1.2 percent this year, and the deficit-to-GDP ration would fall to less than 4 percent.

However, the international lenders have warned that a precautionary line could be a more sensible option. Lagarde said the IMF looks forward to continuing to work closely with the Portuguese authorities to address the remaining challenges.

[Source: Xinhua, Washington, 04May14]

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