Following the established practice of Banco de Portugal, and in line with the rules of the Eurosystem projection exercises, the current projections only consider the ﬁscal consolidation measures that have been speciﬁed in sufﬁcient detail and approved, namely those within the scope of the State Budget for 2011. Against this background, it is important to stress that the ﬁscal developments underlying the current exercise do not reﬂect all the measures required for compliance with the demanding ﬁscal targets assumed by the Portuguese State for 2011 and, in particular, for 2012. In 2011 the persisting non-negligible implementation risks are due, inter alia, to the unprecedented magnitude of ﬁscal consolidation. In 2012, the range of additional permanent measures required for meeting the target implied in the commitment of the authorities attains a rather signiﬁcant level. Adopting such measures implies a substantial contraction of economic activity, similarly to the one projected for 2011. In addition, the current outlook does not yet take on board the inevitable deleveraging process in the private sector, including the banking system. In the latter case, the nature of this process will be deﬁned in more detail in forthcoming months. In any case, it will certainly imply signiﬁcant changes in ﬁnancing conditions and an increase in the respective degree of tightness, determining additional downside risks to economic activity. Hence, results pointing to a 1.4 per cent contraction of economic activity in 2011, followed by a 0.3 per cent growth in 2012, are particularly conditional on the abovementioned assumptions. Given that some measures for 2012 have not yet been deﬁned, results for that year should be put into special perspective, considering that neither the budget consolidation process, nor the economy deleveraging process will be concluded in 2011 and that their accomplishment is essential to promote the effective adjustment of external ﬁnancing needs. In effect, these are virtually stable in the current outlook, in spite of the strong fall in domestic demand and the favourable performance of exports.
This information is up to 2012.