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Portugal Economic Snapshot

Economic Forecast Summary (December 2021)

The economy is projected to grow by 4.8% in 2021, 5.8% in 2022 and 2.8% in 2023. GDP should surpass its pre-crisis level only around mid-2022. Robust growth is mainly driven by domestic demand, and will be boosted by the absorption of EU funds. The current rise in production costs, driven essentially by energy prices, is not expected to fuel underlying price pressures substantially given still sizeable slack in the economy.

Reform Priorities (April 2021)

Going for Growth 2021 - Portugal

The pandemic highlighted gaps in the social safety net and risks aggravating the situation for disadvantaged students and vulnerable workers. Increasing the coverage of out-of-work benefits should become the top policy priority. Strengthening efforts to provide individualised support to students at risk remains crucial, as does upskilling of large parts of the workforce, especially with digital skills.

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2021 Structural Reform Priorities

  • Labour market: Reinforce social protection for non-standard employment to reduce precariousness and poverty
  • Education and skills: Raise skills to strengthen productivity, foster the creation of higher quality jobs, and improve equity and well-being
  • Competition and regulation: Strengthen competition in non-manufacturing sectors to bolster export competitiveness and productivity
  • Insolvency: Reduce high corporate leverage to raise investment and promote job creation
  • Tax system: Reduce exemptions and special rates to enhance efficiency of the tax system and strengthen public finance sustainability

 

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Economic Survey of Portugal (February 2019)

The Portuguese economy continues to recover, with past structural reforms and more favourable global economic conditions contributing to the upswing. The economy has largely been sustained by strong export performance since 2010, but domestic demand is now also growing solidly. After receding in the five years following the crisis, employment has picked up and the unemployment rate has fallen from 17% to below 7%. Over the same period, the economy has notably increased its reliance on some renewable energy sources, such as wind power.

Executive Summary

 

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