Budget in focus
The debate and the final vote will only happen near the end of the month, but meanwhile the proposal of the State Budget for 2019 goes through the steps provided by law and this week has several dates of interest. Already this Monday, the discussion in the specialty continues with the auditions of two heavyweights of António Costa's team. The Minister of Planning and Infrastructures, Pedro Marques, will be heard by the deputies of the Budget, Finance and Administrative Modernization Commission at 10 am, and at 4 pm will be the Minister of Labor and Social Security, Vieira da Silva.
The next day the Commission will hear the Defense Minister, João Cravinho (10 hours) and the Minister of the Presidency, Maria Manuel Leitão Marques (at 4 pm). On Wednesday, the agenda includes the hearing of the Minister of Environment and Energy Transition, João Matos Fernandes and the Minister of Justice, Francisca Van Dunem. The highlight of the process is Friday, with the hearing of Mario Centeno, Minister of Finance.
However, at a time when PSD president Rui Rio is accusing the government of lying to the 0.2 per cent deficit in gross domestic product (GDP), saying that it is actually 0.5 per cent, the Public Finance Council will publish the OE Review for 2019. The publication of the analysis was scheduled for November 7, but the institution led by Teodora Cardoso explained that it was delayed one week due to delays in reporting by the Ministry of Finance.
Issue to repay the IMF
The Treasury will next Wednesday to the market to raise up to 1,250 million euros financing that will be directed to an early repayment to the International Monetary Fund (IMF), according to announced on Friday in a statement. The IGCP – Treasury and Public Debt Management Agency said that it will hold on November 14 at 10:30 am two Treasury Bond auctions with maturity on October 25, 2023 and October 17, 2028, with a total indicative amount of between EUR 1 billion and EUR 1,250 million.
Regarding the new placement that will happen next week, the agency led by Cristina Casalinho added that "with this auction, the IGCP intends to prepay part of the IMF loan."
Last month, Assistant Secretary of State and Finance Ricardo Mourinho Félix had announced in an interview with Jornal Económico that the government intended to pay another two billion to the IMF later this year.
The last 10-year OT auction took place on October 10, when the IGCP posted 782 million euros, with an interest rate of 1.939%, which meant a worsening of the country's financing costs to eight-month highs. The demand surpassed the offer by 2.78 times. In the case of five-year debt, the last comparable issue is September 12, with the Treasury putting 328 million euros at an interest rate of 0.647%. At the time, demand was 3.76 times higher than the offer.
GDP in full week of data
The economic data release schedule is well underway this week. On the internal level, the National Statistics Institute presents on Tuesday the Consumer Price Index for October and the following day the rapid estimate of the Quarterly National Accounts in the third quarter of 2018. Also on Wednesday, Eurostat announces the euro zone's GDP between July and September. According to Stefan Rondorf, Senior Investment Strategist, Global Economics & Strategy, of Allianz Global Investors, the highlight will go to Germany's GDP. "This may make an indication on the impact had the decrease in production in the automotive sector had on economic growth in Germany and the euro zone and on the strength of a potential rebates in the coming months."