Portugal: Seventh Review Under the Extended Arrangement and Request for Modification of End-June Performance Criteria—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Portugal

IMF Staff Country Reports, June 13, 2013

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Canonical URL: Portugal: Seventh Review Under the Extended Arrangement and Request for Modification of End-June Performance Criteria—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Portugal

Portugal's program implementation is on track despite difficult economic conditions and significant legal challenges.
The markedly weaker economic outlook provides a strong case for recalibrating the program’s fiscal targets.
The strong adjustment effort needs to be consolidated by sustained fiscal structural reforms.
Continued vigilance is warranted to secure financial stability.
A more competitive economy for sustainable recovery requires addressing nominal rigidities forcefully.
Program success hinges on continued external support and effective crisis management policies at the euro area level.

Recalibrate fiscal targets to reflect the markedly weaker economic outlook.
Consolidate fiscal adjustment through sustained fiscal structural reforms.
Maintain vigilance to secure financial stability, including oversight of banking and financial institutions.
Address nominal rigidities decisively to strengthen competitiveness and support sustainable recovery.
Ensure continued external support and coordination on crisis management policies at the euro area level.

Subject areas: Asset and liability management, Banking, Credit, Debt restructuring, Financial institutions, Fiscal stance, Loans, Money, Public debt, Securities.
Keywords: core solvency ratio, CR, Credit, Debt restructuring, EFF arrangement, executive board discussion, Global, IMF quota, implementation, ISCR, Loans, recapitalization process, reform, restructuring plan, SDR, Securities.