It is not out of deep water yet but debt-burdened Portugal is on course to meet this year’s budget deficit goal, according to inspectors.
Officials from the EU, European Central Bank and IMF have been carrying out the first review of the country’s 78-billion-euro international bailout.
“The good news is that the programme in our view is on track,” said Poul Thomsen, head of the IMF delegation. He added that “the new government has not only fully endorsed the programme but underscored that it intends to implement key measures ahead of time.”
That verdict is a vote of confidence in belt-tightening measures implemented by Portugal’s centre-right administration, in power since June.
Showing it means to carry on in the same vein, Finance Minister Vitor Gaspar announced that hikes in VAT on gas and electricity would be brought forward from 2012 to this year.
The inspectors will recommend that the second installment of Portugal’s rescue funds be paid.
In the middle of the August holiday season, many have other things on their minds than the economy. But the expected announcement of more spending cuts next month is sure to refocus public attention on how to keep Portugal and its people afloat.