Chart of the week: Portugal’s remarkable recovery
At the height of Portugal’s debt crisis in 2011, it cost Lisbon considerably more to borrow over ten years than Rome. Not anymore.
"Portugal is overtaking Italy in the bond-market pecking order," says Aimee Donnellan on Breakingviews. At the height of Portugal's debt crisis in 2011, it cost Lisbon around 11% more to borrow for ten years than Rome. Now the ten-year yield has slipped below Italy's for the first time since 2009.
This cements an impressive rebound. The deficit will slide to just 1.3% of GDP this year, while loosening labour laws has boosted growth to an estimated 2.5% this year. The debt pile of 125% of GDP is shrinking. Italy is growing more slowly, has implemented virtually no structural change, and is politically unstable.