OECD: Portugal back on track but further reforms needed

28 Oct 14
Structural reforms have helped put Portugal’s economy back on track, but further work is now needed to ensure the recovery is durable, the Organisation for Economic Co-operation and Development has said.

By Vivienne Russell | 28 October 2014

Structural reforms have helped put Portugal’s economy back on track, but further work is now needed to ensure the recovery is durable, the Organisation for Economic Co-operation and Development has said.

In its Economic survey of Portugal, published yesterday, the OECD said Portugal’s gross domestic product was set to grow by 0.8% this year and 1.3% next year. Export performance is improving, unemployment is declining and fiscal consolidation has put Portugal’s public finances on a stronger footing.

‘Portugal has made tremendous progress, and its reform efforts are starting to pay off,’ said OECD secretary general Angel Gurría.

‘The main challenge going forward is to build on what has been achieved, this means doing more enhance productivity and competitiveness, and it turn export performance, while addressing the legacies of the crisis – high unemployment, income inequality and poverty.’

Among the OECD’s specific recommendations is further regulatory reform, particularly to the services sector, while changes that introduced firm-level (rather than sector-level) pay bargaining for a limited period should be continued.

Fiscal consolidation should also be maintained, but automatic stabilisers should also be allowed to operate if growth slows.

Meanwhile, the European Commission has ruled that Portugal’s plans to set up a financial institution, the Instituição Financeira de Desenvolvimento (IFD), complied with state aid rules.

The IFD has starting capital of €100m and will provide finance to small and medium-sized enterprises, on a co-investment basis with private investors.

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Related jobs

Most commented

Events & webinars