Portugal was committed to the programme’s implementation, its urgency was understood and accepted by the general public and there was a constructive dialogue with social partners; • The speed and intensity of the response from the tradable sector, in particular exports, was key to the rapid rebalancing of the external accounts and mitigation of the impact of lower domestic demand on the non-tradable sector; • The preservation of confidence in the banking sector, as evidenced by the behaviour of deposits, was crucial to preventing the economy from collapsing with a credit crunch and avoiding the imposition of capital controls.
However, notwithstanding the undisputed progress made, several vulnerabilities and important challenges still remain. Although the level of indebtedness in the Portuguese economy and asset quality on credit institutions’ balance sheets have evolved favourably, there is no room for complacency. It is imperative to ensure budgetary discipline and continue the deleveraging process of the private sector and the strengthening of the banking sector.