Portugal Has Less Room to Maneuver With Rising Debt, IMF Says
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Portugal’s rising debt level is limiting the country’s ability to strike a balance between reducing the budget deficit and supporting growth, the International Monetary Fund said after approving the disbursement of 1.5 billion euros ($1.9 billion) as part of a bailout package with the European Union.
Meeting the targets attached to the loan has become harder because of weaker global demand and rising unemployment, the Washington-based IMF said today. While the extra time given to Portugal to reduce its deficits is welcome, the fund said that “room for maneuver has diminished” because debt is set to peak at about 124 percent of gross domestic product in 2014.