The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This 2001 Article IV Consultation highlights that after an extended period of real convergence in living standards toward the euro area average, the Portuguese economy weakened markedly in 2001. GDP growth in 2001 is estimated at about 1.6 percent, about half the rate recorded over the previous two years. The growth slowdown reflected to some extent the waning effect of euro-entry-related declines in interest rates and private sector responses to rising indebtedness levels. Inflation has continued to exceed the euro area average, reflecting to an important extent relatively strong cost pressures in Portugal.