Portuguese treasury entity woos investors with new presentation
The IGCP, the Portuguese Treasury and Debt Management Agency that manages more than €200Bn in Portugal’s public debt, has produced a new brochure aimed at overseas investors boasting, among other things, its new slimline and efficient public administration service.
The document, which makes a surgical examination of Portugal’s public finances, shows current holders and potential buyers of Portuguese sovereign bonds a public administration service that is much slimmer — a reduction that took place under the previous centre-right PSD government of Pedro Passo Coelho.
In Q1 of 2016 the Portuguese civil service employed 663,000 people in a country with a population of just 10 million. In the third quarter of 2017 that figure dropped down to 660,000 only to increase again to 675,000 last year.
The document states, “The number of public servants has fallen by around 8% since December 2011, putting a lid on current expenses”.
Portugal’s civil service closed 2011 with 728,000 public sector workers and by the end of the third quarter of 2018 that figure had dropped down to 671,000.
By comparing these two periods, it can be seen that the Government has shed 57,000 civil servants, or almost 8%.
And looking at the very latest data for the end of 2018, Portugal’s civil service lost 45,000 workers or 6% to bring the total to 683,000.
In its executive summary, the IGCP’s document states, “Portugal has turned the corner from the European crisis, with economic rebalancing and structural reforms underpinning the recovery.
It also states that Portugal’s companies have been diversifying their exports which has improved the country’s resilience to external shocks.
An increase in services exports has also been noted, led by high tourism receipts from a greater diversity of countries of origin in tourism.
It trumpets the lowest deficit in over 40 years, with the structural balance reaching 1.0% of GDP in 2017.
But most important of all, it predicts through well-founded calculations that Portugal’s public debt has declined from a gross debt of 126.2% of GDP in 2012 to 122% of GDP in 2018 with a target reduction to 102% of GDP by 2022.
In its What has been achieved section, it states reduced severance and unemployment benefits, more flexible working arrangements, a reduction in company administrative burdens (licensing), lower costs of context (railways, communications and ports), rental market reform, social security reform, simplified tax compliance, privatisation programme and judicial reform.
In the financial sector, the report stresses improvements in efficiency of credit allocation by banks while the Resolution Fund to inject capital into the banking system has seen the Portuguese State’s loan from the ECB extended for up to 30 years with maturity contingent on the final outstanding amount.