The IMF estimates “a full-year deficit of 4.4% of GDP, compared to the budget target of 2.7%” which means that Portugal appears to have missed the 2015 fiscal deficit target, and is expected to remain in the EU’s Excessive Deficit Procedure.
In that context, Directors encourage the Portuguese authorities to build on the efforts made so far, regarding austerity measures, and “pursue prudent policies and reforms”. According to the IMF report, the authorities have committed to prepare additional measures, if required to achieve this year’s budget target.
The government’s reaction however was frosty, according to the Associated Press. The Finance Ministry's somewhat tetchy reply said it is committed to economic reform, as well as helping the poor. It also casts doubt on the reliability of the IMF's forecasts, as it fails to include economic developments since January 2016.
The new Socialist government of Portugal came into power in November 2015 and was fiercely critical of the IMF's focus on austerity during a three-year program that followed Portugal's 78 billion-euro ($88.5 billion) bailout in 2011.