But if the shortfall in demand persists, inventories are run down, leading to an even sharper fall in output.

ECONOMIST: Beyond the business cycle? | The

Both the government and the European Commission have acknowledged the risks of depending on increased tax revenue, which is more growth sensitive, to meet fiscal targets and contingency spending cuts amounting to 0.5 per cent of national output have prepared in case of another tax shortfall.

CNN: Portugal braced for 'fiscal earthquake'