Portuguese Fiscal Situation before Bail-out
Portuguese Fiscal Policy Assessment
Abstract: This work tries to do an overview of the Portuguese Fiscal situation ex-post the 2008 financial crisis. There is a short description of the GDP evolution and how it affected fiscal revenues and expenditures: revenues decreased with the crisis and then got up with taxes increasing and expenditures add an upward trend (from 2008-2010, for 2011 everything is projected). Moreover, we compute four types of fiscal balances (total, primary, adjusted from GDP and structural) and conclude that all of them incur a deficit and the huge gap is between the total and primary deficit, showing that the debt service is becoming heavier.
Course: Macroeconomic Policies
Fall semester 2010
Professor: João Amador
Teacher Assistant: Sharmin Sazedj
Diogo Silva no. 9395
Francisco Palmares no. 9647
Gustavo Direitinho no. 9320
Pedro Casimiro no. 9467
Introduction
This work consists on a fiscal assessment of an European Monetary Union country. The country chosen to analyze was Portugal and the time range goes from 2008 to 2011 (2011 is a projection). The fiscal data (including projections) comes from the Stability and Growth program and Governmental Budget Bill 2011, mainly.
The structure starts with a description of the economic activity (mainly GDP and output gap), fiscal revenues and outlays (and their components), and the deficit generated (including adjustments from economic environment and temporary measures, as well as fiscal policy cyclicality). After determining these flux variables, we compute and examine the sustainability of the public-debt stock variable. Finally we make a recommendation to future fiscal policy in order to ensure the sustainability of future generations and to fight the external pressures of foreign creditors.
Evolution of the Economic Activity
The description of the economic activity is important because it influences fiscal revenues, expenditures and deficits through the automatic
Abstract: This work tries to do an overview of the Portuguese Fiscal situation ex-post the 2008 financial crisis. There is a short description of the GDP evolution and how it affected fiscal revenues and expenditures: revenues decreased with the crisis and then got up with taxes increasing and expenditures add an upward trend (from 2008-2010, for 2011 everything is projected). Moreover, we compute four types of fiscal balances (total, primary, adjusted from GDP and structural) and conclude that all of them incur a deficit and the huge gap is between the total and primary deficit, showing that the debt service is becoming heavier.
Course: Macroeconomic Policies
Fall semester 2010
Professor: João Amador
Teacher Assistant: Sharmin Sazedj
Diogo Silva no. 9395
Francisco Palmares no. 9647
Gustavo Direitinho no. 9320
Pedro Casimiro no. 9467
Introduction
This work consists on a fiscal assessment of an European Monetary Union country. The country chosen to analyze was Portugal and the time range goes from 2008 to 2011 (2011 is a projection). The fiscal data (including projections) comes from the Stability and Growth program and Governmental Budget Bill 2011, mainly.
The structure starts with a description of the economic activity (mainly GDP and output gap), fiscal revenues and outlays (and their components), and the deficit generated (including adjustments from economic environment and temporary measures, as well as fiscal policy cyclicality). After determining these flux variables, we compute and examine the sustainability of the public-debt stock variable. Finally we make a recommendation to future fiscal policy in order to ensure the sustainability of future generations and to fight the external pressures of foreign creditors.
Evolution of the Economic Activity
The description of the economic activity is important because it influences fiscal revenues, expenditures and deficits through the automatic