## Portugal: First Review Under the Extended Arrangement

_IMF Staff Country Reports, September 13, 2011_

## Source details

**Canonical URL:** [Portugal: First Review Under the Extended Arrangement](https://www.imf.org/en/publications/cr/issues/2016/12/31/portugal-first-review-under-the-extended-arrangement-25229)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/portugal-first-review-under-the-extended-arrangement-25229/index.md)
- [Structured JSON version](/en/publications/cr/issues/2016/12/31/portugal-first-review-under-the-extended-arrangement-25229/index.json)
- [Bundle manifest](/en/publications/cr/issues/2016/12/31/portugal-first-review-under-the-extended-arrangement-25229/bundle-manifest.json)

## Bibliographic details
- Published: September 13, 2011
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781463902971.002

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### Summary findings
- Macroeconomic imbalances in Portugal are large, and structural problems are deep-rooted.
- The new government’s strong commitment to program implementation is encouraging.
- Fiscal performance to date demonstrates the need to refocus the fiscal strategy on strong expenditure control, as envisaged under the program.
- Preventing an excessively rapid deleveraging of the banking sector is crucial to support activity.
- Ultimately, program success hinges on opening up the economy and improving competitiveness.
- The European Council’s renewed support enhances prospects for the program’s success.

### Fiscal assessment and recommendations
- Finding: Fiscal performance so far indicates insufficient emphasis on expenditure control.
- Policy recommendation: Re-focus the fiscal strategy on strong expenditure control, consistent with the program design.
- Risk note: Fiscal risks remain a material concern given large macroeconomic imbalances and deep-rooted structural problems.

### Banking sector and financial stability
- Finding: Rapid deleveraging of the banking sector would undermine activity and program objectives.
- Policy recommendation: Implement measures to prevent an excessively rapid deleveraging of the banking sector to support economic activity.

### Structural reforms and competitiveness
- Finding: Long-term success requires opening up the economy and improving competitiveness.
- Policy recommendation: Advance structural reforms aimed at reducing barriers to competition and enhancing competitiveness across sectors.

### External support and program prospects
- Finding: The European Council’s renewed support enhances prospects for the program’s success.
- Implication: Continued external support is an important complement to domestic policy implementation for program credibility.

### Thematic tags (as provided)
- Banking, Credit, Expenditure, Fiscal risks, Money, Public debt, Public financial management (PFM), Revenue administration
- Keywords included: capital plan, CR, Credit, fast-track Emergency Financing Mechanism procedure, Fiscal risks, Global, government, ISCR, plan, Portugal's IMF quota, ruling government, SDR, social security system

*Portugal: First Review Under the Extended Arrangement — September 13, 2011*

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## Content in this bundle

- [Cr11279 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2011/_cr11279.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/portugal-first-review-under-the-extended-arrangement-25229_