OECD's annual survey of the Portuguese economy. The survey begins with a description of recent trends, with particular reference to the reasons for the growth pause and the prospects for a resumption of the expansion. Chapter II analyzes the convergence process from the point of view of interest rate trends and the fiscal consolidation needed to achieve the Maastricht criteria. Chapter III discusses the need for reform of social security, especially the public pension system, both from the point of view of containing the expansion of public debt and reducing the future burden of non-wage labor costs on the working population. Impediments to employment growth and the policy response to prevent unemployment becoming structural are analyzed in Chapter IV, which elaborates a broad program of reforms for Portugal in the light of the requirements of the OECD Jobs Study. The survey closes with conclusions presenting key points along with policy recommendations.