The International Monetary Fund warns that the Portuguese pension system remains "expensive" and "generous"
The IMF revised its forecast for Portugal's budget balance of 2020, expecting a surplus of 0.1% of GDP, and maintained a forecast of a deficit of 0.2% this year, despite the injection into Novo Banco.
"The budget deficit is expected to fall in 2019, despite the larger than expected injection of capital into Novo Banco," reads the report of the IMF mission in Portugal under Article IV, where the institution maintains its May forecast, a deficit of 0.2% of GDP this year, "an improvement" compared to the deficit of 0.5% registered in 2018.
In the annual review report on the Portuguese economy, the institution says that "the above-expected cost of injecting capital into Novo Banco will increase spending commitments by 0.4% of GDP above the projected for that purpose."
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