Due to persistent structural problems, Portugal’s economy was among the hardest hit by the financial crisis in the eurozone. Low savings among households, increased government debt, and high corporate leverage resulted in large current account deficits over the past decade. This imbalance has been mainly financed by bank borrowing from abroad, and a net negative international investment position of about 100% of GDP in 2008. The global financial crisis has exacerbated various pre-existing, home-grown problems. Rigidities in the labor market and strict regulation have discouraged investment, and led to weak labor productivity. Due to a deteriorating fiscal position and the necessity to put in place aggressive austerity measures in line with eurozone requests, growth is expected to be subdued in Portugal for the next two to three years.