Costa’s left-wing government took power in October 2015, after ousting the Social Democrats (PSD) in coalition with the Popular Party (CDS-PP), following a censorship motion in parliament. Costa, the former mayor from Lisbon, vowed to reset wages and pensions as well as to reverse the austerity cycle that had pushed the country to its knees. Many deemed this coalition a failure, as it seemed, at first glance, unworkable – but significant progress has been achieved since the Socialist Party, backed by the left, took control over the country. [...]
According to the spring forecast released by the European Commission last week, “Portugal’s economic growth is set to rise further in 2017 before easing off in 2018. The labour market is also expected to improve with unemployment falling from 11.2% in 2016 to 9.2% in 2018. After turning out at 2.0% of GDP in 2016 the general government deficit is set to remain below 2% over the forecast horizon.” [...]
However, Portugal still carries a high general public debt as a proportion of GDP; it rose slightly to 130.4% in 2016, mainly due to higher issuance of government debt for the ongoing recapitalisation of the state-owned bank CGD. However, the ratio is forecast to decline to 128.5% in 2017 and to 126.2% in 2018, due to primary budget surpluses and continued economic growth.
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