The IMF warns that one-quarter of European countries must implement annual fiscal consolidation averaging 1% of GDP over the next five years to stabilize debt. This scale of adjustment is comparable to the austerity measures Portugal faced during the troika intervention period.
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Read today’s briefingThe IMF warned that nations, particularly advanced economies with high debt levels, must prioritize budget consolidation as rising interest rates increase fiscal pressure. The organization states that delaying these adjustments will lead to more painful outcomes.
The managing director of the IMF warned during a speech in Singapore that governments must now prioritize fiscal consolidation and that central banks will maintain restrictive interest rates.
Finance Minister Joaquim Miranda Sarmento stated that Portugal aims to reduce public debt to 84.5% of GDP in 2027, with a long-term goal of falling below Germany's debt level by 2031. He defended the state budget proposal for 2027, acknowledging a reduction in global public investment compared to the previous two years, while noting that investment levels remain above the average of the decade preceding 2025.