Optimal Fiscal Path Considerations: Portugal

July 11, 2023

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Format: Chicago

Ippei Shibata, and Volodymyr Tulin. Optimal Fiscal Path Considerations: Portugal, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Summary

Despite achieving a rapid reduction in the public debt-to-GDP ratio in recent years, Portugal's debt ratio remains relatively high at 113.9 percent of GDP in end-2022. This paper employs an analytical model to determine the appropriate trajectory for structural consolidation to sustain ambitious debt reduction over the medium term, taking into account the uncertainties in the economic landscape. The model points to a need for continued fiscal tightening between 2024 and 2028. Optimal consolidation would be higher under higher longterm interest rates, lower medium-term growth prospects, or increased market sensitivity to debt.

Subject: Financial services, Fiscal consolidation, Fiscal policy, Fiscal stance, Government debt management, International organization, Monetary policy, Public financial management (PFM), Real interest rates

Keywords: D.C. International Monetary Fund, Cycle stabilization, Fiscal consolidation, Fiscal stance, Government debt, Government debt management, Government deficit, I. model detail, Interest rate sensitivity, Model point, Portugal's debt ratio, Real interest rates, Washington

Publication Details

Pages:

10
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2023/045
Stock No:

SIPEA2023045
ISBN:

9798400247231
ISSN:

2958-7875

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