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flag Portugal Portugal: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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 2009201020112012 (e)2013 (e)
GDP (billions USD) 234.81229.15e241.92e240.63244.82
GDP (Constant Prices, Annual % Change) -2.51.3e-2.2-1.81.2
GDP per Capita (USD) 22,09521,542e22,69922,54022,901
General Government Balance (in % of GDP) -9.1e-9.4e-4.0-1.3-0.0
General Government Gross Debt (in % of GDP) 83.0e92.9106.0111.8114.9
Inflation Rate (%) -0.91.4e3.4e2.11.5
Unemployment Rate (% of the Labor Force) 10.612.012.213.413.4
Current Account (billions USD) -25.63-22.67-20.90-15.39-13.09
Current Account (in % of GDP) -10.9-9.9e-8.6-5.3-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

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) 11.2 28.2 60.6
Value Added (in % of GDP) 2.3 22.7 75.0
Value Added (Annual % Change) -1.2 -8.7 -0.2

Source: World Bank - Last Available Data.

 
 
 
 
Learn more about Market Analysis about Portugal on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
64.0/100
Position:
Moderately free
World Rank:
65/179
Regional Rank:
32/42

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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Foreign Trade in Figures

Portugal's economy is open to foreign investment, trade represents more than 70% of  the GDP (during the period 2007-2009). Becoming a member of the European Union changed the structure of the Portuguese imports and exports.  The country exports more and more technological equipment instead of the traditional agricultural products or products from the textile and clothing industry.

The European Union is Portugal's main customer, followed by the United States. Other commercial partners of Portugal are China, Nigeria and Brazil.

The trade balance of Portugal is structurally in deficit, however its balance experienced an improvement during the crisis, due to the fall of imports which was much higher than the drop on exports. Since the beginning of 2011, Portugal has experienced a decline in its trade deficit over the same period in 2010, thanks to higher exports.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 66,67378,19589,97571,64875,277
Exports of Goods (million USD) 43,33251,51555,81644,31048,744
Imports of Services (million USD) 11,81413,98916,26214,15414,120
Exports of Services (million USD) 18,19322,97825,91622,40122,856
Imports of Goods and Services (Annual % Change) 7.25.52.8-10.8-
Exports of Goods and Services (Annual % Change) 9.37.4---
Imports of Goods and Services (in % of GDP) 39.740.242.635.4-
Exports of Goods and Services (in % of GDP) 31.032.232.527.8-
Trade Balance (million USD) -23,107-26,450-33,787-24,831-23,751
Trade Balance (Including Service) (million USD) -16,755-17,458-24,054-16,408-14,921
Foreign Trade (in % of GDP) 70.872.475.163.2-

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Spain 26.5%
Germany 12.8%
France 11.8%
United Kingdom 5.4%
Angola 5.2%
See More Countries 38.3%
Main Suppliers
(% of Imports)
2010
Spain 31.2%
Germany 13.8%
France 7.2%
Italy 5.7%
Netherlands 5.1%
See More Countries 37.0%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.5%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 4.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 4.8%
Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. orthopaedic footwear, skating boots with ice or roller skates attached, and toy footwear) 3.1%
Reception apparatus for radio-telephony,...Reception apparatus for radio-telephony, radio-telegraphy or radio-broadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock 2.2%
See More Products 79.5%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 8.8%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.2%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 3.5%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 2.4%
See More Products 75.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Prime Minister
Ministry of Agriculture (MADRP)
Ministry of the Economy (ME)
Ministry of Foreign Affairs (MNE)
Business development agency (AICEP)
Ministry of Finance (Inland Revenue)
Statistical Office
I.N.E. Statistics Portugal
Central Bank
Banco de Portugal
Stock Exchange
Bolsa Valores Lisboa/Euronext
Search Engines
Busca
Guianet
NetIndex
Sapo
Economic Portals
Eu sou economista
ISCTE-Inst. Sup. Ciencias Trabalho e Empresa
Portal da empresa
Portal Sites

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Political Outline

Executive Power
The President is the Head of State. He is elected by universal suffrage for a five year term and is the Commander-in-chief of the Army. After a general election, the leader of the majority party or coalition is usually appointed to be Prime Minister by the President, for a four year term. The Prime Minister is the head of the government, and he holds the executive power, which includes implementing laws and overseeing the everyday running of the country. The Council of Ministers is appointed by the President on the recommendation of the Prime Minister. There is also a Council of State, which acts as an advisory body to the President.
Legislative Power
Portuguese legislative power is unicameral. The parliament, called the Assembly of the Republic, has 230 seats. The members are elected by universal suffrage for a four year term and the executive branch of government is directly or indirectly dependent on the support of parliament often expressed by a vote of confidence. The Prime Minister cannot dissolve the Assembly, but the President can do so and call for an early election if he so wishes. Portuguese citizens enjoy considerable political rights.
Main Political Parties
Political life in Portugal is mainly dominated by two parties: the PS (Socialist Party) and the PSD (Social Democratic Party). Other parties active in the country are:
- The PP (Popular Party) – Christian democrats,
- The PCP (Portuguese Communist Party) – left-wing party,
- Bloco de Esquerda (Left-wing block) - Association of parties left of the Communist party
Current Political Leaders
President : Anibal CAVACO Silva (since March 2006) - PSD
Prime Minister: Jose SOCRATES (since March 2005) - PS
Next Election Dates
Presidential elections: January 2016
 

Indicator of Freedom of the Press

World Rank:
40/178
Evolution:
8 places down compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
1/7

Map of freedom 2010
Source: Freedom House

 

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Last Updates: January 2012