PORTUGAL'S economy is coming closer to a catastrophic derailment which could trigger a eurozone meltdown, amid a toxic combination of rising bankruptcies, falling numbers of new businesses and high Government debt.
The number of bankruptcies in Portugal is rising
The number of companies going bust in the European nation has soared by 49.5 per cent in the first eight months of the year, with 2,474 companies being declared insolvent - 819 more than in the same period last year - according to data from the Ignios Business Centre.
Last month insolvent companies jumped by nine per cent from August last year - equivalent to 20 more companies in difficulties every day.
The catalyst for the trouble appears to be a plunge in exports.
Antonio Monteiro, chief executive of Ignios, said: "Exports, the main engine of economic growth in recent years, reveal a slowdown in recent figures released by the Institute of National Statistics.
"This will predictably have consequences for companies in the traditionally exporting districts, that until now have shown better numbers than the areas most dependent on domestic demand."
At the same time, the number of new businesses has tumbled by 3.5 per cent.
In the first eight months of the year there were 25,457 records of enterprises created, but this is almost 1,000 fewer companies over the same period last year.
It comes as Portugal continues to struggle to get a grip on its budget deficit, while the economy is weighed down by debt at GDP ratio of 129 per cent.
Eurozone finance ministers recently ordered Lisbon to tackle spending and income to bring the deficit below three per cent.
Portugal was recently let off a fine for budget failures by European policymakers The two countries were recently let off fines for budget failures, amid fears the punishment could fuel anti-euro sentiment among the populations.
