Economic Trends/Outlook in Portugal

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Economic Overview

From the beginning of 2009, Portugal is in the core of a deep recession, caused by the collapse of foreign demand and the restrictive financial conditions that have affected all the sectors of the economy, such as exports and investments in particular.  After it was contracted to 2.7% in 2009, the Portuguese economy has experienced a moderate growth again in 2010, estimated at 1.1% of the GDP. 

Due to the increase in public expenditure aimed to support the economy, the budgetary situation was highly deteriorated, the deficit reached more than 7% of the GDP.  The public debt has also experienced an important increase, surpassing 90% of the GDP for the first quarter 2011. Facing this situation, the government established a severe plan intended to control and to reduce expenditures through a fiscal tax increase.  A large plan of privatization has also been launched in order to increase revenues. Structural measures were also announced, including a labor code reform that allows more flexibility. The country should receive a financial assistance from the EU and IMF, which could reach 80 billion EUR.

With an unemployment rate that has risen to around 10%, an increase of differences between the north and the south, and the erosion of the purchasing power, the social tensions have become evident in Portugal.

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 234.09 229.34e 236.15e 237.47e 241.69e
GDP (Constant Prices, Annual % Change) -2.5 1.4e -1.5e -0.5e 0.9e
GDP per Capita (USD) 22,028 21,559e 22,157e 22,245e 22,608e
General Government Balance (in % of GDP) -7.3e -6.7e -3.2e -2.5e -2.9e
General Government Gross Debt (in % of GDP) 76.1e 83.3e 90.6e 94.6e 97.5e
Inflation Rate (%) -0.9 1.4e 2.4e 1.4e 1.4e
Unemployment Rate (% of the Labor Force) 9.6 11.0e 11.9e 12.4e 11.9e
Current Account (billions USD) -22.92e -20.28e -23.13e -22.60e -
Current Account (in % of GDP) -10.1e -9.0e -10.2e -9.8e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

The agricultural sector is not so productive because it is less mechanized; it represents a little over 2% of Portugal's GDP and employs 11.5% of the population. The main productions are cereals, fruits, vegetables and wine. The exports of  Port wine represent 1.4% of total exports. Portugal has many natural resources. The mining sector (copper, tin) represents 6% of the GDP and Portugal is one of the main exporters of marble. The forests of Portugal provide a large portion of the world's cork supply.
The manufacturing industry is modern and it is made up of small and medium-sized companies. Its main sectors of activity are metallurgy, mechanical engineering, textiles and construction. Moreover, the country has increased its role in the European automobile sector and has a world class mold manufacturing industry.
Services, particularly tourism, play an important role which is rapidly increasing. The tertiary sector contributes to more than 70% of the GDP.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 11.5 29.3 59.2
Value Added (in % of GDP) 2.3 22.8 74.8
Value Added (Annual % Change) -1.2 -8.7 -0.3

Source: World Bank - Last Available Data.

For more detailed background on Industries in Portugal, click here.

Indicator of Economic Freedom

Moderately free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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Experts Views (1)
  • Portugal-Exporter Guide

    In 2011, Portugal’s agriculture, fish and forest product imports from the United States were valued at $401 million, a substantial increase from previous years.

    Foreign Agricultural Service on 18 Feb 2013 related to Economic Trends/Outlook in Portugal

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  • Foreign Agricultural Service

    Part of USDA, the United States