The slow recovery that Portugal is currently experiencing is not enough to create the jobs that the country needs. And without changes, the result will be the departure abroad of the most qualified and stay in Portugal of hand labor increasingly inadequate to the needs.
After almost four years since arriving in Portugal to negotiate the bailout program of the economy, the IMF continues, in its first report after the troika have left the country, to draw a gloomy outlook for growth and to recommend further structural reforms and fiscal consolidation. W ithout them back guarantee, the crisis will continue long into the labor market.
The Fund says that the expected growth in the Portuguese economy for years to come, and that will be around 1.5%, not will be enough to stop the stagnation of the labor market. As a result, the adjustment stands to be done via the output of workers, particularly skilled, abroad, leaving the country a workforce long brushed off the market and that is with inadequate qualifications needs.
In the analysis that makes the employment situation in Portugal, the IMF begins to reassess which indicators you use. Up Lall, the Fund’s mission chief in Portugal had already said not understand how the unemployment rate had fallen so much in recent quarters. Now, in the report published on Friday, goes further and recognizes that looking only at the unemployment rate does not fully capture the reality.
It uses so a broader indicator, joining the official numbers discouraged workers – “that have increased dramatically during the crisis” – and that, as employees work fewer hours than they would like, putting the real unemployment at 20.5% in the third quarter of 2014, higher than the unemployment rate number commonly used (currently 13.1%, why not account for the discouraged and underemployment). Before the 2008 crisis, the same measure of real unemployment was 9.8%.
Against this background, the IMF concludes that any serious attempt to solve the problem of stagnation of the labor market “implies growth of aggregate demand greater than the estimated “. The institution led by Christine Lagarde predicts that average growth of 1.5% economy in the period between 2015 and 2019, will reduce unemployment “only” 2.5 percentage points in 2019 to 18%.
The Fund notes that, in this context of low growth, there is a “serious risk” that the labor market stagnation is eliminated by additional output of workers abroad and “atrophy of skills of workers who are out of the market work for an extended period. ” That is, the adjustment may be made via the output of workers, particularly skilled, abroad, leaving the country a workforce long brushed off the market and that is with inadequate qualifications needs.
Risks to growth
solution, add the technicians who were in Lisbon between 28 October and 4 November, involves putting the economy to grow. But optimism is not much.
At present, you see the IMF is an economy that has begun to slow down and that is again to be dependent on private consumption to grow, rather than exports. This is why the IMF predicts that, after a growth of 0.8% in 2014, Portugal grow this year by 1.2%, a value which is below the 1.5% that are still planned by the Government.
In the medium term, the Fund sees as a base scenario the economy to grow by 1.5% per year. Rather, the forecasts are of a growth of 1.3% in 2016 and 1.4% in 2017, pointing to leave for variations of the annual GDP of 1.6%. But, warn IMF staff, even this scenario, will only happen if the governments in Portugal do the structural reforms recommended by the troika and a number of external and internal risks do not materialize.
“The medium-term growth depends on projected substantial increases in total factor productivity, which in turn depend on the successful implementation of structural reforms,” said the Fund, warning that “if reform efforts begin to show signs of a prolonged pause, new downward revisions to the medium-term growth may be inevitable. “