Portugal

Portugal, officially the Portuguese Republic, is a country on the Iberian Peninsula, in Southwestern Europe. It is the westernmost country of mainland Europe, being bordered by the Atlantic Ocean to the west & south and by Spain to the north and east. The Portugal–Spain border is 1,214 km (754 mi) long and considered the longest uninterrupted border within the European Union.

Portugal is a highly developed country with a high-income advanced economy and very high living standards. It is the 11th most peaceful country in the world, maintaining a unitary semi-presidential republican form of government. It has the 18th highest Social Progress in the world, putting it ahead of other Western European countries like France, Spain and Italy. It is a member of numerous international organizations, including the United Nations, the European Union, the Euro Zone, OECD, NATO and the Community of Portuguese Language Countries.

Portugal major exports are clothing and footwear, machinery, chemicals, cork and paper products, hides, tungsten and wine. Portugal imports mostly machinery and transport equipment, chemicals, petroleum, textiles and agricultural products. European Union is by far its largest trading partner accounting for about 72% of total trade.

THE GLOBAL COMPETITIVENESS REPORT ON PORTUGAL

PORTUGAL ECONOMY

The Economy of Portugal is of a mixed nature and functions in support of a country. The WEF’s Global Competitiveness Report for 2014-2015 ranked Portugal 36th; Portugal’s ranking had been falling since 2005 (with the exception of 2011) but recovered from the 51st position in 2013 to the 36th in 2014.

The Portuguese Economy has been steady, expanding continuously since the third quarter of 2014, with a yearly GDP growth of 1.5% registered in the second quarter of 2015.[26] The economy growth has been accompanied by a continuous fall in the unemployment rate (11.9% in the second quarter of 2015, compared with 13.9% registered in the end of 2014). The Government budget deficit has also been reduced from the 11.2% of GDP in 2010 to 4.8% in 2014.

Portugal is home to a number of notable leading companies with worldwide reputations, such as

1. Portucel Soporcel, a major world player in the international paper market;
2. Sonae Indústria, the largest producer of wood-based panels in the world;
3. Amorim, the world leader in cork production;
4. Conservas Ramirez, the oldest canned food producer;
5. Cimpor, one of the world’s 10th largest producers of cement;
6. EDP Renováveis, the 3rd largest producer of wind energy in the world;
7. Jerónimo Martins, consumer products manufacturer and retail market leader in Portugal, Poland and Colombia;
8. TAP Portugal, highly regarded for its safety record, and one of the leading airlines linking Europe with Africa and Latin America (namely Brazil)

UNIVERSITY OF COIMBRA 

Since 1290

The oldest University in Portugal and one of the oldest in the world.

The Portuguese educational system has been in gradual modernization and relative expansion since the 1960s, achieving recognition for its world-standard practices and trends in the 21st century. Portugal is home to several world class universities and business schools that have been contributing for the creation of a number of high renowned top international managers and are attracting an increase number of foreign students.

The economic recovery is projected to continue in 2016 and 2017, boosted by private consumption and exports. However, growth will ease from the high rate in 2015, as much of the current investment pick-up is likely to lose steam once capital stocks have been rebuilt, following a decline in investment of nearly 35% between 2007 and 2014. The pace of the recovery will allow further reductions of the unemployment rate, albeit only small ones.

Although Portugal has been a leader in renewable energy, legacy remuneration schemes provided significant rents to incumbent electricity generators. Even though policy action has led to a considerable reduction in these rents, additional measures should be taken to further decrease them and to boost competition in the sector, also enhancing the competitiveness of downstream industries. Accelerating plans to improve connectivity to European networks would also stimulate efficiency. Further strengthening the reliance on green taxes, while reducing other taxes, would enhance investment incentives and promote sustainable growth.

For 2016, growth is expected to stand at 1.5%, similarly to 2015, against a deteriorating international environment despite of the accommodative monetary policy stance resilient non-durable private consumption. In 2017 the Portuguese economy is expected to accelerate to 1.7%, reflecting optimistic investment and exports.

In the 2016-17, private consumption is influenced by the measures included in the State Budget for 2016. For 2018, economic activity is projected to slow down to 1.6%, reflecting ongoing structural constraints on the potential growth of the Portuguese economy, in particular the high indebtedness of the public and private sectors.

In 2013 the behavior of net external demand joined with a lower contraction of domestic demand contributed to an easing of the fall in GDP of approximately 2% in comparison to 2012.

In conclusion, the recent recession (2011 onwards) is associated with a modest recovery of the economy after the 2008-2009 crises, with the recessive nature having been determined by the impact of the restrictive policy applied to the Portuguese economy. A similar trend is observed on the demand side, which reflects the contraction of domestic demand. The improvement reported in net external demand wasn’t sufficient to change the decline on the aggregate demand (Statistics Portugal, 2014).

Portugal’s economy has benefited from recent structural reforms. Ongoing efforts have focused on reducing the inefficient and oversized government sector, better managing public finance, and reforming loss-making state-owned enterprises. A return to sovereign-bond markets has enabled Portugal to begin repaying its IMF loan ahead of schedule.

Economic Freedom Snapshot

• 2016 Economic Freedom Score: 65.1 (down 0.2 point)
• Economic Freedom Status: Moderately Free
• Global Ranking: 64th
• Regional Ranking: 30th in Europe
• Notable Successes: Trade Freedom and Business Freedom
• Concerns: Management of Public Finance and Labor Freedom
• Overall Score Change Since 2012: +2.1

Portugal’s economic recovery remains highly vulnerable to challenges related to ensuring fiscal stability and restoring financial-sector competitiveness. Despite relatively sound economic institutions and transparent regulatory and judicial systems, the indebted public sector is still a drag on overall economic dynamism.

Portugal showed rock-solid economic growth in 2015 and recent data suggest that positive momentum persisted at the beginning of the year. Industrial production and retail sales increased notably in February and confidence among business and consumers improved in March. On 16 March, the Parliament took a final vote on the 2016 budget that the center-left government led by the Socialist Party (PS) had proposed. The budget, which targets an overall fiscal deficit of 2.2% of GDP this year, was approved and received support from the government’s backers, the Communist Party (PCP), the Left Block (BE) and The Greens (PEV). Markets also welcomed the budget; yields on Portuguese 10-year bonds have remained relatively stable in recent weeks. The European Commission, nonetheless, warned the government that it still risks breaking EU fiscal rules and asked Lisbon to prepare additional measures for a review in April.