external financing the imbalances that i referred to made the portuguese economy extremely vulnerable to the international financial crisis that started in 2008 and to its contagion effects. when the crisis hit, followed by a global recession, an expansionary fiscal policy was once again adopted, and this time it was particularly intense, despite the imbalances hitherto accumulated and the absence of fiscal space. in 2010, the budget deficit was above 11 % of gdp and gross public debt was around 96 % of gdp – of which, more than half was external debt. the high and rising level of external indebtedness, coupled with weak growth of potential output, fuelled investors ’ concerns about the country ’ s ability to pay back its debt. domestic banks and the government found it increasingly difficult to obtain external financing : banks had to turn to the eurosystem, whereas public debt was increasingly placed in domestic banks. this situation ultimately resulted in the country ’ s inability to fund itself in the international financial markets in the first half of 2011, after the 10 - year yields had nearly doubled those of the previous year, reaching over 9 %. recourse to external official financing under a financial assistance programme became unavoidable. 5. 2011 onwards – the adjustment programme the economic and financial assistance programme was agreed in may 2011 between the portuguese authorities, the eu and the imf. on the basis of a strategy aimed at restoring international financial market confidence in the portuguese economy and fostering competitiveness and sustainable economic growth, the programme rested on three major pillars : fiscal consolidation ; safeguarding the stability of the financial system ; and structural transformation of the portuguese economy. banco de portugal participated in the definition and implementation of the programme ’ s financial stability pillar, which aimed to : reinforce solvency, promote gradual and orderly deleveraging and ensure the stable financing of the banking system ; reinforce banking system supervision ; improve the regulatory framework. banco de portugal ’ s responsibilities in the programme ’ s implementation were mostly related to its mandate to safeguard the stability of the portuguese financial system. the bank also participated directly and indirectly in other ways – for example by providing 3 / 6 bis central bankers'speeches economic and financial advice to the government and reporting statistical data – and took part in different initiatives led by the portuguese authorities. the bank also shared responsibilities in processing the financial assistance disbursements and interest payments, acting as an intermediary between the financing bodies and the portuguese treasury and government debt agency. the total amount of

goods and services that create import purchasing power and liability servicing capacity. over the years, the policy endeavour has been to secure a wide diversification in india ’ s export profile in terms of both products and destinations. in particular, product diversification has enabled india to broaden its export basket relative to brics peers and reduce its vulnerability to trade shocks. apart from diversification, india is now exporting sunrise products like electronics, chemicals and drugs and pharmaceuticals for which demand is expanding at the global level. in the smart phone segment of electronic goods, india has transformed itself from being a net importer to an exporter with the impetus from the phased manufacturing programme. 9. looking ahead, several initiatives have been put in place and others are being launched on an ongoing basis to enable export industries to regain productivity and cutting edge competitiveness. they include upgradation of export facilities, integration of indian farmers and their products with global value chains, and trade facilitation measures. more recently, efforts are going into reimbursement of taxes and duties, including electronic refund of input tax credits in gst. an 2 / 4 bis central bankers'speeches action plan for 12 ‘ champion ’ services sectors, including it, tourism and hospitality, and medical services has been developed since february 2018. the reserve bank and the government are actively engaged in the promotion of e - commerce platforms that will boost the exports of both merchandise and services. all these steps seek to create a more conducive climate for exports. capital flows 10. with regard to capital flows, india has adopted an approach marked by progressive liberalisation but calibrated to the realities of the domestic situation, including the evolution of financial markets. a diverse range of instruments for managing exchange rate risk for an expanding investor base has come into play. india ’ s hierarchical policy approach – preferring equity flows over debt flows, and preferring fdi flows over portfolio flows within equity flows and long - term debt flows over short - term flows within total debt flows – has influenced the composition of capital flows. 11. turning to equity flows, fdi policy has been progressively liberalised across various sectors in recent years to make india an attractive investment destination. sectors that have been opened up in recent years include defence, construction development, trading, pharmaceuticals, power exchanges, insurance, pensions, financial services, asset reconstruction, broadcasting and civil aviation. 100 per cent fdi has also been allowed in insurance intermediaries. in august 2019, fdi norms in