Portugal: Selected Issues

IMF Staff Country Reports, July 12, 2019

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The paper focuses on cross-country differences in savings rates in advanced European countries, exploring demographic, fiscal and financial factors explaining why household savings are low in Portugal compared to its peers.
Portugal’s household saving rate is lower than those of the average European country.
Factors identified as explaining the lower household saving rate in Portugal (as suggested by a comparison against another 14 European countries conducted with the aid of panel regressions) include:
- lower disposable income
- lower financial net wealth
- higher old-age dependency ratio
- higher government spending on pensions
- higher government spending on social protection benefits
- higher homeownership ratio
Other potential contributors to low household saving in Portugal include:
- lower education levels
- lower fertility rate
- lower private pension coverage
Many of these factors are not amenable to simple or direct policy interventions, though policies that promote economic growth could have positive side effects on household saving.

More specific policy options to boost household saving include:
- measures to promote private occupational and personal plans, including some changes in taxation
- developing incentives to work past age 65

Subject: Aging, Expenditure, Income, Labor, National accounts, Pension spending, Pensions, Personal income, Population and demographics
Keywords: Aging, asset allocation, CR, employee, employee age, Europe, household saving, Income, ISCR, pension schemes, Pension spending, Pensions, Personal income, Portugal, rate, saving rate, saving-investment balance, tax treatment

Portugal: Selected Issues; IMF Country Report No. 19/222; June 19, 2019
- Portugal: Selected Issues; IMF Country Report No. 19/222; June 19, 2019 (Markdown version)
- Portugal: Selected Issues; IMF Country Report No. 19/222; June 19, 2019 (PDF)