Portugal's budgets (accounting for the effects of loans and transfers) have been in deficit since 1974. Major factors contributing to the deficits included spending on health and education programs, funding for major public investment projects, and large state-owned enterprise payrolls. To finance the deficit, the government issued bonds in the domestic market, which also serves the monetary policy purpose of absorbing excess liquidity. The government's objective to join the Economic and Monetary Union (EMU) was achieved in 1999. Since then, monetary policy responsibilities have been absorbed by the European Central Bank. Public debt exceeded 3% of GDP in 2001, exceeding EU limits and opening the country up to sanctions from the rest of the EU.
The US Central Intelligence Agency (CIA) estimates that in 2001 Portugal's central government took in revenues of approximately $45 billion and had expenditures of $48 billion. Overall, the government registered a deficit of approximately $3 billion. External debt totaled $13.1 billion.
The following table shows an itemized breakdown of government revenues. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.
|REVENUE AND GRANTS||100.0%||44,999|