02262cas a2200241 a 4500 AALejournalIMF018764 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484375969 1934-7685 BD-DhAAL BD-DhAAL International Monetary Fund. European Dept. Portugal : Selected Issues. Washington, D.C. : International Monetary Fund, 2018. 1 online resource (93 pages) IMF Staff Country Reports <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This Selected Issues paper describes financial conditions and growth at risk in Portugal. The macro-finance literature and recent experience provide compelling evidence that financial imbalances grow in good times, creating downside risks to economic growth. The analysis highlights the importance of the price of risk, leverage and credit growth as leading indicators of risks to gross domestic product growth. The price of risk appears to provide the most powerful signal in the short term, while credit aggregates are the most significant predictor in the medium term. This finding is consistent with the volatility paradox and is line with other empirical studies. The Growth-at-Risk (GaR) model suggests contained downside risks to Portugal's growth projections at the current juncture based on financial conditions data, but credit growth should continue to be monitored given still high leverage. The moderate risk to growth identified by the GaR model reflects the impact of low credit spreads and volatility in the financial markets, in their turn reflecting the prevailing policy mix. Still, a repricing of risks and other shocks could be magnified by the still-high leverage, and lead to less favorable growth outcomes. Mode of access: Internet IMF Staff Country Reports; Country Report ; No. 2018/274 Full text available on IMF http://elibrary.imf.org/view/journals/002/2018/274/002.2018.issue-274-en.xml IMF e-Library