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Portugal Has Corrected Imbalances in Its Economy, Gaspar Says

March 01, 2013

Portugal has corrected imbalances in its economy as it reaches the beginning of the end of a European Union-led bailout program, Finance Minister Vitor Gaspar said.

“Portugal has already corrected the main macroeconomic imbalances and structural barriers that were at the origin of this serious crisis,” Gaspar said in parliament today. Unemployment is the “most salient sign” of the social costs of the crisis, he said.

Portugal’s jobless rate rose to a euro-era record of 16.9 percent in the fourth quarter. Unemployment averaged 15.7 percent in 2012, up from 12.7 percent in 2011, and the government predicts it will increase to 16.4 percent this year. The euro-area jobless rate rose to a record 11.9 percent in January from a revised 11.8 percent in December, the EU’s statistics office said today.

Portugal may get an additional year to narrow its budget deficit as the country’s economic outlook worsens, Gaspar said on Feb. 20. He estimates the gross domestic product forecast for 2013 may be revised downward by about 1 percentage point during a review of the aid program that began on Feb. 25. The government’s last estimate was for GDP to contract 1 percent in 2013 before expanding 0.8 percent in 2014.

A demonstration against the government’s austerity policies is scheduled to start tomorrow from 4 p.m. in central Lisbon. While so far there haven’t been constant clashes with police in Portugal, officers on Nov. 14 had to push back protesters throwing stones in front of parliament in Lisbon.

To contact the reporter on this story: Joao Lima in Lisbon at jlima1@bloomberg.net

To contact the editor responsible for this story: Anabela Reis at areis1@bloomberg.net


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