PORTUGUESE ECONOMY REMAINS BUOYANT DESPITE CRISIS Portugal's economy, which has been enjoying one of its most buoyant periods in more than a decade, may now be strong enough to shrug off the country's latest government crisis, analysts said. But the April 3 ousting of Prime Minister Anibal Cavaco Silva's government could slow economic reforms and investment as Portugal continues to adapt to membership in the European Community, which it joined in January last year, they said. Cavaco Silva's minority Social Democratic Party, PSD, was toppled in a parliamentary censure vote by left-wing parties. The centre-right administration had made economic growth reform a priority in its 17 months in office. In 1986, Portugal's economy grew four pct, its current account surplus swelled to more than one billion dlrs and inflation fell to 10 pct, from 20 pct in 1985. Analysts and businessmen said the prospects of instability were worrying but they felt the foundations for continued growth had not been badly shaken. "The economy has developed a certain self-confidence that is now less dependent on the political situation," said Fritz Haser, economics professor at Universidade Livre, Lisbon. "The market doesn't see this as a real crisis yet," economist Jorge Braga de Macedo told Reuters. Businessmen have identified political instability over the last 13 years as one of the biggest obstacles to lasting economic progress. The PSD administration was the 16th formed since the 1974 revolution. Portugal's developing stock markets, however, remain buoyant. Brokers and unit trust managers said the recent surge in economic confidence under the PSD rule was still largely underpinned by continuing optimistic forecasts. Investment grew nearly 10 pct in 1986 and a Bank of Portugal forecast, released on the day the PSD government fell, predicted the pace of investment and overall economic growth would remain at similar levels this year. But analysts said the crisis interrupted current policies and could slow economic development. Soares, who is expected to announce a decision by the end of the month, can either call early elections or form a new government from parties in the existing left wing-dominated parliament. Many businessmen said they strongly favoured quick elections as the best solution. "There is a good chance that a majority government could result from early elections," Confederation of Portuguese Industry (CIP) president Pedro Ferraz da Costa said. He said they were optimistic this could mean the continuation in the near future of liberalisation policies introduced over the last year. The left-wing parties favour a parliamentary solution, but the PSD said it wants an early election in which opinion polls say they could win an overall majority. A PSD majority would also open the way for more wide-ranging reforms, such as relaxation of labour laws and possible denationalisation of industry, the analysts said. Cavaco Silva has accused the left-wing opposition parties of blocking key economic reforms. The left-wingers said Portugal's positive economic results were more the product of favourable international conditions such as cheaper oil and raw material imports, than of PSD policies.