Speech given for the official launch by OECD Secretary-General, Angel Gurría:
- Presentation of the 2008 Economic Survey of Portugal
- Apresentação do Estudo Económico de Portugal 2008
Workshop Presentation by OECD Secretary-General Angel Gurría:
- The 2008 OECD Economic Survey of Portugal - Presentation at the Workshop
- Estudo Económico da OCDE sobre Portugal 2008 - Apresentação no Seminário
Chapter 1: Economic performance and key challenges
After a weak growth performance in the early 2000s, more recent economic developments have been encouraging, and the budget deficit has been reduced to more sustainable levels. Nevertheless GDP growth is not high enough to allow a catch up with standards of living in more affluent OECD countries. Many structural measures have been undertaken in recent years. The reform process should be deepened in order to improve Portugal’s growth performance on a sustained basis. Policies should aim at raising the economy’s capacity to adjust smoothly to the changing international environment and seize new opportunities created by globalisation. This chapter identifies three main challenges that Portugal must face to achieve stronger growth: i) maintaining the momentum of fiscal consolidation to achieve sound public finances; ii) embracing globalisation t; and iii) improving the functioning of the labour market and enhancing human capital to facilitate adjustments in the changing environment.
Chapter 2: Securing fiscal consolidation
The fiscal deficit fell substantially in 2006 and 2007, with a wide-ranging consolidation programme, including shorter-term measures and deeper reforms to address problems in spending control. In particular, the comprehensive reforms to the public administration and the pension schemes tackle some of the main underlying drivers of spending growth and are likely to continue paying dividends in the medium-term. The main fiscal challenge for Portugal is to secure the results achieved in fiscal consolidation and reduce the deficit further. The focus should be on the implementation of the public administration reform; continuing the health care reform; improving the performance and efficiency of state-owned enterprises; ensuring the sustainability of the contributory pension scheme, which may require that additional measures be taken; and dealing with ageing pressures on the health budget. Further improvements should also be made in strengthening the medium-term fiscal framework and enhancing the efficiency of public finances.
Chapter 3: Maximising the gains from integration in the world economy
Openness contributed to growth performance in the past. However, export performance has been disappointing over the past decade. Portugal has the potential to benefit more from globalisation. There are encouraging signs about the economy’s capacity to seize this opportunity, including growing product and market diversifications and recent large FDI inflows. The government has already made significant progress in enhancing the business environment, including through the SIMPLEX programme. Further action should be taken to facilitate the adjustment of the economy and reap more benefits from openness. An easing of product market regulations would contribute to making the economy more efficient. Portugal also needs to strengthen competition and improve regulations in key infrastructure sectors (telecommunications, electricity and transportation), to enhance the quality, efficiency and quantity of the services they provide. This would help the cost-competitiveness of firms in Portugal, facilitate trade flows and make Portugal a more attractive destination for FDI.
Chapter 4: Improving the functioning of the labour market
Labour market outcomes have deteriorated since 2000. Unemployment is high and a large proportion of workers are on short-term contracts or in self-employment. The broad strategy must include labour market reforms to facilitate adjustments in the changing environment and human capital formation. In particular, there is a need to address rigidities in the formal labour market and improve the balance between flexibility and workers’ protection. Effective training is also required to improve the skill match for new entrants and to help displaced workers in sectors affected by structural adjustments. Some measures have already been taken. The government has launched an initiative to upgrade competences of young people and adults at risk. It is also reviewing labour market settings and legislation The measures taken and proposed go in the right direction. Continuity in the reform process and implementation remain a challenging task.
How to obtain this publication
The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.The complete edition of the Economic survey of Portugal 2008 is available from:
For further information please contact the Portugal Desk at the OECD Economics Department at email@example.com. The OECD Secretariat's report was prepared by Bénédicte Larre, David Haugh and Claudia Cardoso under the supervision of Stefano Scarpetta. Research assistance was provided by Roselyn Jamin.