Brussels, 20/02/2013 (Agence Europe) - Portugal is anticipating a much deeper recession than expected this year. According to a report by news agency AFP, Portugal's finance minister, Victor Gaspar, announced on Wednesday that GDP forecasts now stand at -2%, as opposed to initial GDP forecasts of - 1%. Gaspar added that the country expected its international creditors, to give it another year to reduce its deficits. These forecasts are now expected to be quoted on Monday to the troika (the European Commission, the ECB and the IMF), which will be travelling to Portugal to arrange another evaluation mission.
The minister explained that the economic situation will also have implications for the pace of budgetary adjustment in the future. He added that he believed it reasonable to hope that the European Commission will propose an extra year for Portugal to be able to correct its excessive budgetary deficit.
In exchange for a €78 billion loan from the European Union and the International Monetary Fund, Portugal is committed to implementing a wide ranging austerity programme. According to a provisional estimate from the National Statistics Institute, Portugal experienced a 3.2% fall in GDP last year, although the centre-right government and troika had forecast a contraction of 3%. (SP/transl.fl)