Brussels, 11/07/2012 (Agence Europe) - On Tuesday 10 July 2012, the Portuguese Central Bank said that the recession would not be as severe this year as expected, but new austerity measures may still be needed to meet the international aid plan targets.
In its summer newsletter, the Bank of Portugal forecast that gross national product would shrink by 3.0% this year, rather than 3.4% as initially forecast. The new forecast matches those of the Portuguese government and the European Commission. The central bank expects the economy to continue to shrink in 2013. The €78 billion international bailout plan for Portugal from the EU and the International Monetary Fund sets targets that the bank says cannot be delayed, even though they will cause a shrinkage of GDP. Lisbon is due to cut its budget deficit to 4% of GDP in 2012 and to 3% in 2013. The central bank says additional austerity measures may have to be introduced to meet the budget targets. At the end of August 2012, a new troika fact-finding mission will be sent to Lisbon to examine progress in implementing the reforms set out in the aid programme. (SP/transl.fl)