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Comunicado do IGCP

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15/01/10 12:25

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'Statement' do Instituto de Gestão da Tesouraria e do Crédito Público (IGCP) para tentar acalmar as agências de 'rating'.

Following the recent spread performance of the Portuguese Bonds resulting from negative headlines, we would like to reaffirm that the budget proposal for 2010 will be submitted to Parliament by the end of January. Nevertheless we think it is appropriate to give information to the market on recent developments:

As a background information, the last estimate by the European Commission of the Portuguese public debt as a percentage of GDP for 2010 is 84.6% (EC Autumn forecasts 2009).

Between 2005 and 2008, this same government (re-elected in September 2009) managed to reduce the budget deficit from 6.1% of GDP to 2.6%, which represents a good track record in consolidating public finances, and the sharp increase in 2009 was a general feature all over the world. Several very important structural reforms have already been implemented, namely the pension system reform, that removed the threat to the sustainability of public finances of an ageing population.

Rating agencies expressed their concern on the ability of the re-elected government, due to the loss of a Parliament majority, to pass on the necessary measures to resume the path of fiscal consolidation that was interrupted with the financial crisis.

Last week, the major opposition party, that alternates government with the incumbent socialist party, stated that they are available to negotiate a regime pact for the next 4 years with the aim of public finances consolidation.

Yesterday, the Government stated that wages in the public sector would not increase in 2010.

These measures, among others that will be adopted, constitute clear signs of the government's intentions to start budget deficit reduction in 2010. The first draft of the budget is expected to be released on the 26th of January, and we will communicate to the market participants the major developments as early as possible.

Alberto Soares
Presidente do Conselho Directivo/C.E.O.
IGCP - Instituto de Gestão da Tesouraria e do Crédito Público IGCP - Portuguese Treasury and Government Debt Agency

 





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