Annual real GDP growth in Portugal in the period 1999–2006 averaged 1.7%. In Ireland, real output growth continued instead at a strong pace (at 6.5% on average) in this period and the fiscal balance was in slight surplus.
Following the slowdown in activity, ULC growth and inflation pressures diminished in Portugal (to 3.1% and 3.0% on average, respectively), while they gradually picked up in Ireland (3.2% and 3.5%, respectively, on average) in the period 1999– 2006. Since 1999, the Portuguese economy has not succeeded in improving its competitiveness and its sizeable current account deficit remains.