Summary:EXECUTIVE SUMMARY
Portugal’s practices meet most of the principles of the revised Fiscal Transparency Code at good or
advanced levels. A number of areas still present practices at a basic level, but in most of these
cases this reflects reforms that have recently been launched and have not yet been fully
implemented so as to affect current practices. Indeed, if measured against the practices observed
prior to the recent financial crisis, there has been remarkable progress. The challenge is to press
ahead with the reform agenda so that all fiscal transparency practices meet good or advanced
levels, thus strengthening even further the management of public finances and the associated risks.
The key findings of the present Fiscal Transparency Evaluation are:
• Fiscal reporting is in line with good or advanced practices, particularly in compliance with EU
requirements and ESA 95 standards, but still lacks a sound conceptual accounting framework based on
internationally accepted standards.
• Fiscal forecasting and budgeting have improved over the last three years, although investment
evaluation only meets the basic standard of the Code.
• Reporting of fiscal risks is in its infancy and in spite of numerous initiatives undertaken in
the last few years, such as the publication of a fiscal risk statement, remains fragmented.
The large amount and good quality of information available allows a very preliminary and partial
estimate of the public sector net worth and total risk exposure. An estimated negative net worth
position of 140 percent of GDP (including the liabilities of the main defined-benefits
employment-related pension scheme) and a sizeable exposure to various contingent liabilities,
although some of these have a low probability of crystallizing, are reminders of the still fragile
status
of Portugal’s public finances.