After entering the EU in 1986, Portugal benefited from low interest rates and some growth momentum. However, the difficulty in taming fiscal imbalances, the pro-cyclicality of fiscal policy, the use of extraordinary fiscal measures, coupled with the 2008-2009 economic and financial crisis led to...

The incoming Labour Government of 1997 promised a new approach to the conduct of fiscal policy. Two lessons to be learnt from previous experience were: (I) adjust for the cycle and build in a margin for uncertainty; (2) set stable fiscal rules and explain clearly fiscal policy. Although the...

Significant progress has been made in macroeconomic stabilization under two successive SBAs but the economic recovery remains fragile. Growth is expected to remain subdued in the near term and to only gradually recover over the medium term, with risks to the outlook mostly on the downside. With...