Fiscal Balance in Portugal
Portugal - Fiscal Balance
Portugal rescues Banco Espirito Santo
Portugal’s second-largest bank, Banco Espirito Santo, was bailed out and broken up on 4 August following the announcement that the bank lost EUR 3.6 billion in the first half of 2014, the greatest amount ever for a Portuguese bank. Banco Espirito Santo’s substantial losses stemmed from exposure to their parent companies, three of which have filed for protection from creditors. In May, the Portuguese Central Bank revealed that “serious accounting irregularities” were discovered during an audit of Espirito Santo International, one of these parent companies. Regulators are now investigating allegations of fraud surrounding the bank and other Espirito Santo entities. The failure of Banco Espirito Santo—the only Portuguese bank to pass the European stress tests of 2009 to 2011—raises questions regarding whether more troubles are concealed within Europe’s banking sector.
The Portuguese Central Bank split Banco Espirito Santo into two separate entities. A new bank, Novo Banco, was created, and the sound business activities from Banco Espirito Santo (all deposits, senior debt and most of the assets) were transferred over to that bank. Novo Banco received a EUR 4.9 billion capital injection through Portugal’s Resolution Fund, which was set up by Portugal in 2012 and funded by the Portuguese banking sector. The Portuguese government will provide the fund with a EUR 4.4 billion loan using remaining credit from the country’s bailout, since the fund has not yet been fully developed. The remaining toxic assets were left in Banco Espirito Santo and will be liquidated.
While the collapse of Banco Espirito Santo is a setback for Portugal, panelists do not expect it to impact the country’s future growth. FocusEconomics Consensus Forecast panelists expect that GDP will expand 1.0% in 2014, which is unchanged from last month’s projection. For 2015, the panel expects economic growth to accelerate to 1.5%.
Portugal - Fiscal Balance Data
|Fiscal Balance (% of GDP)||-4.4||-1.9||-3.0||-0.4||0.2|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||0.45||-1.90 %||Jan 01|
|Exchange Rate||1.12||0.65 %||Dec 31|
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August 31, 2021
Industrial production grew 0.5% year-on-year in seasonally-adjusted terms in July (June: +10.8% s.a.
August 31, 2021
A second estimate confirmed that GDP rebounded, expanding 4.9% on a seasonally-adjusted quarter-on-quarter basis in the second quarter, above the 3.2% contraction seen in the first quarter, as restrictions were severely tightened throughout the better part of Q1.
Portugal: Consumer confidence reaches pre-pandemic levels, economic sentiment remains steady in August
August 30, 2021
Consumer confidence soared to minus 11.9 in August, from minus 17.0 in July, hitting the highest level since February 2020, just before the pandemic hit.
July 31, 2021
Industrial production rose 10.4% year-on-year in seasonally-adjusted terms in June (May: +26.6% s.a.
July 30, 2021
According to a preliminary reading, GDP bounced back in the second quarter, growing 4.9% on a seasonally-adjusted quarter-on-quarter basis and contrasting the 3.2% contraction logged in Q1.