Template-Type: ReDIF-Paper 1.0 Author-Name: Carlos Marinheiro Author-Name-First: Carlos Author-Name-Last: Marinheiro Author-Name: Amilcar Sousa Author-Name-First: Amilcar Author-Name-Last: Sousa Author-Name: Ana Pinheiro Author-Name-First: Ana Author-Name-Last: Pinheiro Title: The climate dimension of fiscal policy sustainability: best practices in Green Budgeting and lessons for Portugal Abstract: The Green Budgeting technique is being adopted by an increasing number of countries and has the potential to align fiscal policy objectives with climate and environmental goals. Given that the (financial) sustainability of public finances and environmental sustainability are intrinsically interconnected with each other, this paper argues that the traditional public debt sustainability analysis should be expanded to encompass climate and environmental sustainability considerations. Other key elements of a proper budgetary framework, such as fiscal transparency should also be broadened to include the disclosure of the environmental and climate impacts of fiscal policy. Green Budgeting is a growing technique that can be used to expand the scope of such usual fiscal concepts. One of the main tools for its adoption is Green Budget Tagging, which enables citizens to assess the environmental and climate impacts of fiscal policy, on both the tax and spending sides of the state budget. It enables to capture both the positive and negative impacts of fiscal policy. Additionally, it provides more visibility to the amount of resources countries allocate to climate and environment goals and to mitigation and adaptation policies, while allowing the assessment of whether such goals are attained. A proper working fiscal framework, including the adoption of accrual accounting and performance programme budgeting, seems to be instrumental in this domain along with strong political commitment. Portugal already took a few steps, such as recently enacted Climate Law, but still has a long way to go in terms of Green Budgeting. This paper proposes a roadmap for its adoption. To start with, both the completion of the public accounts reform and the full adoption of programme budgeting foreseen in the 2015 Budgetary Framework Law should be attained. The meeting of such two pre-conditions will then lay the foundations for the implementation of Green Budgeting and to disclose the climate and environmental impacts of policy measures, following the international best practices. The adoption of Green Budgeting might also pave the way to the emission of Green Bonds to finance specific environmental and climate related projects. Such bonds might be a cost-effective way to finance the substantial green investment needs in a highly indebted country while contributing to the decrease of global risk. Length: 24 pages Creation-Date: 2022-09 File-URL: https://www.cfp.pt/en/publications/other-publications/the-climate-dimension-of-fiscal-policy-sustainability-best-practices-in-green-budgeting-and-lessons-for-portugal File-Format: Application/pdf File-Function: First version, 2022 Number: 01/2022 Classification-JEL: H5, H61, H63, Q58, Q51 Keywords: green budgeting; sustainability; green tagging; green financing; budgeting; Portugal Handle: RePEc:alf:wpaper:2022-01 Template-Type: ReDIF-Paper 1.0 Author-Name: Miguel St.Aubyn Author-Name-First: Miguel Author-Name-Last: St.Aubyn Title: A belt and braces approach – the effect of soft and hard lockdowns against Covid-19 in Portugal Abstract: The post-Christmas surge of Covid-19 cases in Portugal is empirically estimated using a nonlinear exponential growth equation. The `soft’ lockdown, implemented on 15th January is shown to induce an initial inflexion point from which cases decline, and the subsequent `hard’ lockdown from the 22nd January reinforces this downwards trend. Taking no action would have led to an estimated 20 000 cases per day in the week ending the 15th February. The effect of the soft lockdown, strengthened by school closures and a harder lockdown, avoided this scenario, and curtailed the number of daily new cases to less than 3000 by week ending the 15th February. It is estimated that without the adoption of school closures and harder lockdown measures, the estimated cases in Portugal would be approximately 9700 per day. Length: 10 pages Creation-Date: 2021-02 File-URL: https://www.cfp.pt/en/publications/other-publications/a-belt-and-braces-approach-the-effect-of-soft-and-hard-lockdowns-against-covid-19-in-portugal- File-Format: Application/pdf File-Function: First version, 2021 Number: 01/2021 Classification-JEL: Keywords: COVID-19, lockdown, Portugal, school closures Handle: RePEc:alf:wpaper:2021-01 Template-Type: ReDIF-Paper 1.0 Author-Name: Nuno Goncalves Author-Name-First: Nuno Author-Name-Last: Goncalves Author-Name: Tiago Martins Author-Name-First: Tiago Author-Name-Last: Martins Title: Qualitative survey data and the perceived ‘normal’ growth: evidence for Portugal and the Euro-area Abstract: There is an increasing concern among analysts and policymakers that the economic growth that can be inferred from survey data has been changing over time, particularly after recessions, which may harm the effectiveness of soft indicators for short-term forecasting and standard business cycle analysis. This paper tries to contribute to the existing literature, investigating the relationship among economic sentiment, GDP growth, consumer confidence and private consumption growth for Portugal and the Euro-area. It also assesses the perceived ‘normal’ GDP growth as a complementary measure of potential growth. Overall, results show the existence of a linear relationship between soft-data and real variables growth that differs from one country to another and over time. In particular, recessions are found to play a key role, as the post-crisis ‘normal’ growth is, on average, lower than the pre-crisis. Moreover, there is some evidence that the estimated ‘normal’ GDP growth seems to fit fairly well in potential growth estimates, as both measures present identical trends and patterns in most periods of the sample and share identical behaviour in recessions. Length: 25 pages Creation-Date: 2020-12 File-URL: https://www.cfp.pt/en/publications/other-publications/qualitative-survey-data-and-the-perceived-normal-growth-evidence-for-portugal-and-the-euro-area File-Format: Application/pdf File-Function: First version, 2020 Number: 02/2020 Classification-JEL: C32, E32, O42 Keywords: survey data, business cycle, potential output, Portugal, Euro-area Handle: RePEc:alf:wpaper:2020-02 Template-Type: ReDIF-Paper 1.0 Author-Name: Miguel St.Aubyn Author-Name-First: Miguel Author-Name-Last: St.Aubyn Title: Covid 19 and loss of production – an estimate for Portugal from electricity consumption Abstract: The relationship between electricity consumption and economic activity has been widely studied. It comes then as no surprise that the need to obtain a fast estimate for the GDP drop following the perceived devastating economic effects resulting from the Covid-19 pandemic would lead forecasting practitioners into exploiting this relationship. This drive is further explained, at least in the case of Portugal, by the fact that electricity consumption daily data are published almost in real-time as compared to delays in other potentially informative variables. As usual, there is a trade-off between speed and estimate accuracy. Any result of this kind is not a suitable replacement for better and more complete information, and, in due time, complete and accurate measurements will be available. In the meantime, less precise but already available instruments provide us with some guidance and insight. Length: 8 pages Creation-Date: 2020-05 File-URL: https://www.cfp.pt/en/publications/other-publications/covid-19-and-loss-of-production-an-estimate-for-portugal-from-electricity-consumption File-Format: Application/pdf File-Function: First version, 2020 Number: 01/2020 Classification-JEL: E17, E23, C32, Q43 Keywords: forecast, economic activity, electricity consumption, Portugal Handle: RePEc:alf:wpaper:2020-01 Template-Type: ReDIF-Paper 1.0 Author-Name: Nuno Goncalves Author-Name-First: Nuno Author-Name-Last: Goncalves Author-Name: Domingos Seward Author-Name-First: Domingos Author-Name-Last: Seward Title: Forecasting unemployment in Portugal: A labour market flows approach Abstract: This paper applies a labour market flows approach to forecasting the unemployment rate, initially developed by Barnichon and Nekarda (2012) and subsequently extended by Barnichon and Garda (2016), to the Portuguese labour market. We start by implementing a simple two-state labour market forecasting model and then extend it to a three-state labour market forecasting model which incorporates movements in and out of the labour force. We test the forecasting accuracy of each of these models and find that the two-state flow-based forecasting model performs slightly better than the other tested models. We conclude that worker flow data is a valuable input for forecasting the unemployment in Portugal. Length: 46 pages Creation-Date: 2019-11 File-URL: https://www.cfp.pt/en/publications/other-publications/forecasting-unemployment-in-portugal-a-labour-market-flows-approach File-Format: Application/pdf File-Function: First version, 2019 Number: 01/2019 Classification-JEL: C53, E27, J60 Keywords: forecast, labour market dynamics, unemployment rate, worker flows Handle: RePEc:alf:wpaper:2019-01 Template-Type: ReDIF-Paper 1.0 Author-Name: Nuno Goncalves Author-Name-First: Nuno Author-Name-Last: Goncalves Author-Name: Andre Moreira Author-Name-First: Andre Author-Name-Last: Moreira Title: Introducing the Portuguese Macro-Fiscal (PMF) model: A framework for projecting the Portuguese Economy Abstract: This paper gives an overview of the current version of the Portuguese Macro-Fiscal (PMF) model, an estimated quarterly macroeconometric model of the Portuguese economy that is the central tool used by the Portuguese Public Finance Council (CFP) for producing its medium-term macroeconomic projections. The specification of the macro side of the model broadly follows those developed by several Eurosystem central banks, in the tradition of the neoclassical synthesis, appropriately adapted to the Portuguese case. The key extension to this framework – one that reflects CFP’s mission – has been the inclusion of a rich, disaggregated fiscal block. The structure and specification of the model are briefly discussed, and its properties are illustrated through shock simulation exercises. Length: 12 pages Creation-Date: 2018-03 File-URL: https://www.cfp.pt/en/publications/other-publications/introducing-the-portuguese-macro-fiscal-pmf-model-a-framework-for-projecting-the-portuguese-economy File-Format: Application/pdf File-Function: First version, 2018 Number: 01/2018 Classification-JEL: C3, C5, E1, E2 Keywords: macroeconometric model, forecast, simulation, Portugal Handle: RePEc:alf:wpaper:2018-01