Sunday, February 28, 2021

Centeno suggests that moratoriums should be adapted due to the crisis

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Mário Centeno, Governor of Banco de Portugal and former Minister of Finance

The governor of Banco de Portugal (BdP), Mário Centeno, said this Friday that the moratoriums, as well as the measures related to the pandemic, should be adapted according to the different moments of the covid-19 crisis.

“Policies have to be adapted, and surely the issue of default will have this treatment. We have to analyze at every moment the context of crisis in which we live, and adapt the measures to that moment ”, said the head of the central bank in signing a protocol with the Ministry of Labor, Solidarity and Social Security on minimum banking services, which took place this Friday at the headquarters of Banco de Portugal (BdP), in Lisbon.

Without going into detail, Mário Centeno considered that “the financial system was a pillar of resilience and support, through various measures, in particular moratoriums, at a time of great crisis ”experienced because of the pandemic in 2020.

“The expectation of all is that these measures that we have been adopting will continue to be effective and continue to have an impact to allow, for example, that the figures that we learned about the labor market this week, may continue to be a reality” , said the governor of the BdP.

On Thursday, in the presentation of the annual results of Caixa Geral de Depósitos (CGD), a profit of 492 million euros, the executive chairman of the public bank, Paulo Macedo, said that the institution is “available” to restructure debt of unemployed individuals, at the end of the default, scheduled for September.

The manager stressed that “in terms of individuals, unemployment has increased, but disposable income has been maintained in a positive way”, arguing that “there should be a protection scheme for these people“And that the institution” is available to restructure the credits of customers all who at the end of the moratorium are unemployed “.

On Tuesday, the president of BCP, Miguel Maya, had already defended the extension credit moratoriums for companies and workers in the tourism sector, which end on September 30.

BCP will continue to be an advocate for extending moratoriums for the tourism sector as long as the situation of the pandemic is not controlled, not only for companies but also for workers in the sector, ”said Miguel Maya, in an intervention recorded in the webinar“ The State of Tourism ”, promoted by the Confederation of Tourism of Portugal (CTP), underlining that “it is necessary to treat differently what is not the same”.

Last week, during the presentation of BPI’s annual results (profit of 104.8 million euros), the bank’s executive president, João Pedro Oliveira e Costa, said that it is still early to discuss the moratoriums related to the covid-19 pandemic, arguing that they should be located and interpreted as a transitional instrument.

“These are transitional measures. A moratorium is clearly a transitional measure and it is important to have this line of vision on the subject, ”said the head of BPI, stressing that the current situation of beneficiaries of the moratoriums“ is not exactly the same for everyone ”, and that“ there will be more sectors affected by this third wave and also by the prolonged difficult moment of the Portuguese economy, and other sectors that even had some growth or that felt little the situation ”.

International institutions “confident in the medium term”

Mário Centeno said that international economic institutions “are confident in the medium term”, despite the recent downward revision by the European Commission (EC) of national and European economic growth.

“The European Commission’s forecasts reveal what the International Monetary Fund forecasts [FMI] already revealed a few weeks ago, is that international institutions are confident in the medium term, were positively surprised in 2020 with a decrease in activity less than what they projected ”, said the official.

According to the governor, “the adjustment that occurred in the forecasts, in particular for Portugal, in 2021, means that at the end of the year 2021 the activity is, moreover, at a higher level than what was predicted by the European Commission in the autumn” .

The European Commission (EC) foresees a growth in the Portuguese Gross Domestic Product (GDP) of 4,1%, a downward revision of the 5.4% forecast made in November, according to the winter macroeconomic forecasts released on Thursday.

According to the figures, for 2022 the European Commission revised its growth expectation upwards, rising from 3.5% in November to a forecast of 4.3%. “It is true that there is a downward revision of the 2021 growth rate, but an upward revision of the GDP rate of change [Produto Interno Bruto] in 2020 it is higher and in 2022 there is a revision, again, upwards, of the activity ”, he said.

For Mário Centeno, “the recovery path, according to all these predictions, materializes even more strongly than in October“.

The Portuguese Government currently expects a 5.4% GDP increase this year, according to forecasts made when presenting the 2021 State Budget (OE2021), but the Minister of Finance has already admitted a review of the macroeconomic scenario, due the effects of the covid-19 pandemic.

BdP, according to the Economic Bulletin released in December, points to an economic growth of 3.9% this year, in its base scenario. The European Commission has also revised downward the pace of economic recovery this year in Europe, which “remains in the grip of the covid-19 pandemic”, estimating that the euro area will grow 3.8% and the European Union 3.7% .

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