To put this in another perspective - if borrowing for investment purposes had only risen at the same rate as borrowing for owner-occupation, the aggregate debt to income ratio would only have reached 109 per cent, not the 125 per cent that actually occurred. At the former figure, Australia would still be in the lower half of the countries shown in Graph 1.
Therefore it is urgent to refocus the public debate on the Portuguese economy and economic policy in Portugal. Only a reallocation of resources within the economy based on expanding the tradable sector will avoid prolonged relative impoverishment. Growth potential driven by exports is very high and the strong performance of exports makes the point.