Portugal: Selected Issues

International Monetary Fund

No 2006/386, IMF Staff Country Reports from International Monetary Fund

Abstract: A range of indicators point to a competitiveness gap of 10–20 percent with respect to euro area competitors. Closing the competitiveness gap will require an extended adjustment period, even with a jump in total factor productivity (TFP) growth and strong wage moderation. This paper reviews several factors that could help explain the boom and bust behavior of corporate investment. Investor sentiment will recover with the deepening of structural reforms, but high corporate debt level is likely to slow the pace of investment growth in the near future.

Keywords: ISCR; CR; investment; debt; exchange rate; export; business investment; aggregate investment function; investment decision; undertaking investment project; debt hypothesis; Corporate investment; Exports; Exchange rates; Competition; Export performance; Global; Europe (search for similar items in EconPapers)
Pages: 39
Date: 2006-10-31
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