Pay your debts while you can – IMF

Page created: Tuesday, 28 July 2015 9:17 GMT

IMF  Public Debt  Yields

Countries like Portugal with limited budget flexibility should take advantage of the low interest rates prevailing due to the European Central Bank’s Quantitative Easing to pay down their stock of debt, said International Monetary Fund head of Eurozone mission Mahmood Pradhan in a statement published Monday.

The statement, which identified France alongside Portugal as among the countries where it made most sense to reduce debt while the going was good, was released in conjunction with the annual report on the Eurozone by the International Monetary Fund.

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Furthermore, the report saidd that countries such as Germany and the Netherlands should use their budgetary “positions of strength to back investment and structural reforms.”

Following such recommendations “might have a powerful impact on growth” with the European Central Bank’s action having already driven up confidence in the region and thus boosted the terms of financing.

With forecast growth for the 19 member zone standing at 1.5% this year and rising to 1.7% in 2016, the Pradhan signed note identified high levels of unemployment, company debt levels and increasing percentages of non-performing loans as key threats going forwards.