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Capital account

The capital account covers the acquisition/disposal of non-produced non-financial assets and capital transfers. This account includes incentives to investment such as European funds for infrastructure; property transfers such as inheritances or debt forgiveness; and exchanges of trademarks, licenses, land and other natural resources. Regarding the country relationship with the rest of the world, the balance of the capital account shows whether the country receives more than it pays (positive balance or surplus) or pays more than it receives (negative balance or deficit) to the rest of the world.

Capital balance

The capital balance is the difference between capital revenue and capital expenditure.

Capital expenditure

Capital expenditure includes capital transfers, in the form of investment subsidies and other capital transfers, as well as investment expenses: gross fixed capital formation and net acquisitions of non-financial non-produced assets. In public budgetary accounting, the concept of capital expenditure also includes the acquisition of financial assets and liabilities.

Capital repayment

Delivery of the capital received as a loan to the respective lender. It can be made at maturity or in advance.

Capital Revenue

Capital revenues alter the enduring assets of the entity; these are revenues collected occasionally, meaning they have a temporary nature and are generally associated with a decrease in enduring assets or an increase in medium/long-term assets and liabilities. Examples of capital revenues include those arising from the sale of real estate and loans.

Carbon assessment of individual budget measures

Carbon assessment of individual budget measures corresponds to the assessment of the greenhouse gas emissions related with the policy measures contained in the state budget.

Carbon neutrality

Carbon neutrality means reaching the balance point, that is, a neutral balance between greenhouse gas emissions and their sequestration from the atmosphere. Achieving this result is the objective established by the National Roadmap for Carbon Neutrality 2050, which outlines guidelines for reducing current emissions levels and increasing national carbon sinks by 2050. Moving towards carbon neutrality is an important goal to achieve the objectives of the Paris Agreement: limiting the increase in temperature (relative to 1990 values) below 2ºC and continuing efforts to ensure that this average increase in global temperature does not exceed 1.5ºC, to reduce the risks and negative impacts of climate change.

Carry-over effect

The average annual GDP growth rate in volume is determined by the intra-annual growth dynamics of the current year (t), and the intra-annual growth dynamics of the previous year (t-1), which is designated as the carry-over effect. This effect offers the possibility to calculate how much GDP would grow in a given year if all the quarter-on-quarter growth rates (or the ones not yet released) of that year were zero (which is equivalent to assuming that the quarterly levels of GDP in that year would remain at the same level as in the last available quarter). In that case, the growth dynamics of the year under consideration can then be obtained from the difference between the average annual growth rate and the carry-over effect. The carry-over effect can be calculated for any aggregate or variable other than GDP.

Cash basis

This approach is still followed in public budget accounting, according to which transactions are recorded when receipts or payments are made.

Central Government

This subsector is part of General Government and includes the State administrative services ("Integrated Services") and Autonomous Services and Funds (including Reclassified Public Entities). This subsector includes also the non-profit organisations controlled by the Central Administration and whose competence covers the entire economic territory, except for the administration of Social Security Funds.

Centralised appropriations

Expenditure appropriations that are centralised in the Ministry of Finance and are intended for specific budgetary policy purposes. Centralised appropriations were created from 2016 onwards and the most recurrent have been those for the settlement of non-financial liabilities and application of assets, the sustainability of the health sector, the national public counterpart and the participatory budget of Portugal. Other centralised appropriations have been of a one-off nature, such as those to finance expenses arising from the progressive reversal of the remuneration reduction in public administration, the forest fires that occurred in 2017, the unfreezing of careers and the Programme and Support for the Reduction of Public Transport Fare, as well expenses related to the sustainability of the Health sector and unforeseen expenses of the COVID-19 pandemic.

Change over the previous period

The month-on-month or quarter-on-quarter change rates measures the change in an indicator from its value in the immediately preceding period, such as a month or a quarter.

Changes in inventories

Changes in inventories are measured by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories. This component considers the balance of goods that enter and leave the inventory, such as products to be traded, products stolen in stores or raw materials that spoil.

Citizenship Social Protection System

The Citizenship Social Protection System is part of the Social Security System and aims to guarantee the right to minimum living standards for citizens in situations of economic need, prevent and eradicate situations of poverty and social exclusion and compensate citizens for increased family burdens, as well as in the field of disability and dependency. It includes three subsystems, the Social Action Subsystem, the Solidarity Subsystem and the Family Protection Subsystem, and is financed by transfers from the State Budget and tax revenue.

Classification by function

The functional classification of expenditure specifies the purposes and typical activities of the State (in the broadest sense) and highlights the allocation of public resources to the various macro functions: sovereignty, social and economic. Local authorities have their own functional classifier, namely for the purpose of elaborating the multiannual investments plan, including general, social, economic and other functions.

Climate change

Climate change is caused by global warming and refers to variations in long-term weather patterns on Earth, such as temperature, sea levels, and weather. They may be due to natural causes, external forces, or human activities with effects on the composition of the atmosphere. The main consequences are a decrease in water availability and crop yields, an increase in the risk of droughts and a reduction in biodiversity, forest fires and heatwaves. It is expected that, in the near future, economic activity, as well as public finances in all countries around the world, will be subject to strong challenges and pressure due to the direct and indirect impact of climate change.

Cohesion Fund for the outermost regions

The Cohesion Fund for the outermost regions aims to support specific measures implemented to promote the development of the most remote regions of the European Union, known as the "outermost regions" (OR), in which Azores and Madeira are included, and is intended to alleviate the limitations associated with the exceptional geographical situation of these regions.

Coincident indicators

Coincident indicators are composite indicators that aim to capture the underlying evolution of the year-on-year change of the reference macroeconomic aggregate, and therefore do not reflect at each moment the year-on-year change rate of that aggregate. The economic activity indicator and the quantitative indicator of private consumption (by Statistics Portugal) or the economic activity coincident indicator and the private consumption coincident indicator (by Banco de Portugal) are examples of short-term indicators which aim to capture the underlying evolution of the respective macroeconomic aggregates: GDP and private consumption.


An expenditure commitment by a public entity regards the obligation to make payments to third parties in return for the supply of goods and services or the satisfaction of other conditions. Commitments are considered to be incurred when a formal action is performed by the entity, such as issuing a purchase order, purchase order or equivalent document, or signing a contract, agreement or protocol. Unlike "liabilities", commitments may be permanent in nature and associated with payments over an indefinite period of time, namely salaries, rents, electricity or payments of miscellaneous benefits.

Compensation for Inequality of Opportunities (CDO)

The Compensation for Inequality of Opportunities (CDO) corresponds to a share of the Municipal Cohesion Fund (FCM) and is calculated for each municipality in direct proportion to the difference between the municipality's social development index and the national average, weighted by the resident population.

Compensation of employees

In national accounts; compensation of employees (D.1) is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during an accounting period. (ESA 2010, paragraph 4.02).

Compensation of employees consists of wages and salaries in cash or in kind (D.11) and employer’s actual and imputed social contributions (D.121 and D.122). 

Source: Glossary:Compensation of employees - Statistics Explained (europa.eu)

Complementary Social Security System

The Complementary Social Security System includes public and private protection instruments aimed at sharing responsibilities in the field of social protection. The complementary system comprises a public capitalization scheme and complementary collective and individual initiative schemes.

Confidence indicators

Confidence indicators are part of a series of short-term indicators for monitoring developments in the economic environment and anticipating developments in the main macroeconomic aggregates for Portugal. Confidence indicators are qualitative indicators and include, among others, the economic sentiment indicator, sectoral confidence indicators (industry, retail trade, services and construction) and the indicator of consumer confidence.

Consolidated Budgetary Statements

Consolidated budgetary statements are the budgetary statements of the group of entities within the consolidation scope, presented as if they were a single entity. The requirements and reporting models for consolidated budgetary reporting are detailed in the Public Accounting Standard No. 26 - Accounting and Budgetary Reporting of the Accounting Standardization System for Public Administration, which includes the Consolidated Statement of Budgetary Performance and the Consolidated Statement of Rights and Obligations by Nature, which provides information about settlements to be received from entities outside the consolidation scope and accounts payable to entities external to the mentioned scope.

Consolidated debt

The General Government consolidated debt corresponds to the debt of this sector, excluding debt held by General Government entities, which issuance was carried out by entities in the same sector. For instance, public debt securities issued by the State and held by the Social Security Fund (FEFSS) are excluded.

Consolidated Financial Statements

Consolidated financial statements are the financial statements of a public group in which the assets, liabilities, equity, income, expenses, and cash flows of the controlling entity and its controlled entities are presented as belonging to a single entity, the Public Group. The requirements for consolidated financial statements are detailed in Public Accounting Standard No. 22 – Consolidated Financial Statements. This standard defines the accounting requirements, accounting procedures, measurement, accounting for interests not under control, and accounting in case of loss of control.


The accounting transaction of consolidation consists in the elimination of intermediate monetary flows between entities of the General Government universe (in revenue and expenditure), in order to avoid the duplication of these values when calculating aggregate values. From 2017 onwards, flows related to transfers, interest and property income, subsidies, financial assets and liabilities, and acquisition and sale of current goods and services under the Health programme are excluded. By convention, in public accounting, until the end of 2013, consolidation differences were allocated to residual revenue and expenditure headings (other current/capital revenue/expenditure). From 2014 onwards, they were shown under their own heading, so as not to distort the value of the "Other income" and "Other expenses" headings.

Constant prices

A variable is calculated at constant prices when goods and services are valued according to the prices in a base year.

Consumer price

The consumer price is the amount paid by Households when acquiring individual goods and services based on monetary transactions. This amount corresponds to the value actually paid at the moment of acquisition and includes all indirect taxes minus subsidies on products, reductions and discounts, applied to consumers in general, and excludes interest and other costs associated with credit purchase.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is an indicator that aims to measure the evolution over time of the prices of a basket of goods and services considered representative of the consumption structure of the population residing in a given country. CPI information is disaggregated by classes of goods and services (COICOP classification), and by main aggregates of goods and services. The main purpose of the CPI is to cover the total set of goods and services consumed within a given territory by the resident population. To this end, a representative basket, the so-called "consumption basket", is selected. This basket includes, for example, food and beverages, personal hygiene products, newspapers and magazines, expenses in housing, water, electricity, gas and other fuels, expenses in health, transport, communications, education, restaurants and hotels, among many other items. Many of these goods and services are consumed on a daily basis or with a high frequency.

Consumption of fixed capital

Consumption of fixed capital represents the depreciation of fixed assets, as a result of normal wear and tear and obsolescence. This estimate of decline in value includes a provision for losses of fixed assets as a result of accidental damage which can be insured against.

Contingent liabilities

Contingent liabilities are potential liabilities or losses that may be incurred by an entity in the future, depending on the outcome of an uncertain event. Common examples are pending lawsuits and warranties.

Contribution to the change

The contribution to the change highlights the contribution of each component to the rate of change of a specific aggregate (for example, total public revenue or expenditure) based on the relative weight of each component in the total. It is obtained by weighing/weighting the rate of change of the component by its respective weight in the total aggregate for the base period. This way, the sum of the contributions from each component corresponds to the total change of the aggregate. It should be noted that a component with a low weight in the total may exhibit a high percentage change, but this change explains little of the overall change rate of the aggregate due to its limited relative importance.

Contributory scheme

The contributory system is a form of social protection based on professional solidarity and the principle of contribution, which guarantees access to income-replacing social benefits. Workers and employers are responsible for funding through the payment of social contributions. Examples of contributory schemes are the Social Security Welfare System and the Convergent Social Protection Scheme, which covers workers in public employment.

Convergent Social Protection Scheme

The Convergent Social Protection Scheme is a closed social protection scheme that covers civil servants hired up to December 31, 2005 and registered with the Caixa Geral de Aposentações (CGA). Created in 2009, it maintains the organization and funding of the previous civil service social protection scheme.

Countercyclical fiscal policy

Fiscal policy is countercyclical when its orientation runs counter to the economic cycle, generally with the aim of stabilization, seeking to reduce its amplitude. Fiscal policy is said to be countercyclical when: the high phase of the economic cycle is accompanied by a contractionary (or restrictive) stance; or when in the low phase of the economic cycle the stance is expansionary.

Credit rating


Crowding out refers to the negative impact that an increase in government spending (in consumption or investment) can have on private investment. The theory of crowding-out suggests that when the government increases its spending, it will increase the demand for goods and services, which can lead to higher interest rates and inflation. This, in turn, can make borrowing more expensive for private investors, reducing their ability to invest in new projects and businesses. As a result, private investment may decrease or "crowd out" as government spending increases.

Current account

The current account presents flows of goods, services, primary and secondary income between residents and non-residents. This account records exports and imports of goods and services (trade balance), income from those who work or invest (primary income) and current transfers such as remittances from emigrants (secondary income) that the country receives and pays to the rest of the world. The current account balance shows whether the country is able to reduce its external debt (positive balance or current surplus) or if it is worsening its external debt (negative balance or current deficit).

Current balance

The current balance is the difference between current income and current expenditure.

Current prices

A variable is calculated at current prices when goods and services are valued at the prices prevailing in the year in question.

Current primary expenditure

Current primary expenditure corresponds to current expenditure before interest.

Current Revenue (in budgetary accounting)

Current revenues pertain to the non-durable assets of the entity, are derived from gains within the budgetary period, and are exhausted within a one-year period. These are typically revenues that recur in every reporting period. Examples of current revenues include property income, such as interest and rents, sales of goods and services with reductions in non-durable assets.

Current taxes on income, wealth, etc.

Current taxes on income, wealth, etc. comprise personal income taxes (PIT) and corporate income taxes (CIT), as well as other compulsory payments taxing households and corporations, such as taxes on gambling winnings or bank interest. They cover all compulsory, unrequited payments, in cash or in kind, levied periodically by the general government and by the rest of the world on the income and wealth of institutional units, as well as some periodic taxes which are assessed neither on the income nor the wealth.

Cyclical component

The cyclical component of a time series refers to the non-regular fluctuations around the trend, revealing a succession of expansionary and contractionary cycles (which differs from seasonality, that is a regular phenomenon). In the context of fiscal policy, the cyclical component will reflect exclusively the impact of such economic activity fluctuations on the public revenue and public expenditures due to the operation of the conditions of the economy and the effects of the so-called automatic stabilizers, in the absence of any discretionary action taken by economic policymakers .

Cyclical position of the economy

Cyclically adjusted balance

The cyclically adjusted balance is equivalent to the budget balance that would have been observed if the economy operated according to its potential (when GDP is equal to potential GDP). In practical terms, the cyclical component of the balance, estimated according to an appropriate methodology, is subtracted from the observed budget balance. If GDP is lower than potential GDP, the economic cycle has a negative impact on the budget balance, so the cycle-adjusted balance is higher than the observed balance and vice versa if it is higher.

Cyclically adjusted balance of temporary and one-off measures and of special factors

The cyclically adjusted balance of temporary and one-off measures and of special factors corresponds to the balance adjusted for temporary and one-off measures, less special factors.