Portuguese Net Borrowing and the Government Budget Balance. A SAM Approach

An aggregated Social Accounting Matrix (SAM) for Portugal in 1998, based on the country’s national accounts statistics, was used to extract the budget balance of the government subsectors and its components, as well as the net borrowing of the economy as a whole. The importance of the central government’s capital balance for this latter item is identified, whilst the calculated accounting multipliers and their components make it possible to identify those items whose changes can contribute most towards improving the situation. For this reason, both the normal and transposed SAM are modelled, and structural path analysis is used for the decomposition of the calculated multipliers