Portugal has a service-based economy; the services sector contributes about three-fourth of the country’s GDP. Portugal adopted the Euro in 1998. Portugal faces challenges from lower-cost producers in Central Europe and Asian countries resulting in low foreign direct investment into the country.

The government increased its spending to stabilise the economy from the effects of the global financial crisis. This resulted in a high budget deficit amounting to 9.3% of GDP in 2009 and saw public debt level rising to almost 83% of the GDP in the year 2010. This prompted the government to cut down its expenses and tighten its fiscal policies in the year 2010. But the country has failed to reduce its budget deficit.

Portugal’s GDP at current prices (expenditure side) for the year 2009 was EUR 163,891 million as compared to EUR 166,463 million in 2008.

(Source: Central Bank)

(Source: Central Bank)

(Source: Central Bank)

The GDP composition of Portugal is:

·         Agriculture – 2.7%

·         Industries – 23%

·         Services – 74.3%

The nation’s gross national income (GNI) per capita PPP is EUR 21,910 for the year (2009) as compared to USD 21,530 for the year 2008.

(Source: World Bank)

The country’s major exports partners include Spain, Germany, France, UK, US, Angola and Italy. Imports are primarily from Spain, Germany, France, Italy are Netherlands.

Portugal balance of payment reached 10.3% of GDP in the year 2009 as compared to 2008 it was at 12.8%.

(Source: Central Bank)

The total exports were recorded at EUR 3,127,699,595 and imports amounted for EUR 5,046,737,117 for the December 2010.

(Source: National Statistics)

Gross national Income (GNI) per capita PPP of Portugal is USD 23,750 for the year 2009.

The Country’s GNI displays a stable growth since 2005 till 2008. The GNI for the year 2009 was International $ 252.46 billion as compared to International $ 258.68 billion in 2008. Year 2009 experienced a slight dip due to the global economic downturn.

Source: (World Bank)

Income Tax Rate

Income of individuals in Portugal is taxed progressively at 10.5% to 42%.

Individual Income Tax Rate

(Source: worldwide-tax)

Corporate tax

Corporate tax in Portugal is levied at 12.5% for income below EUR 12,500 and 25% for income above EUR 12,500

(Source: doingbusiness.org)

(Source: doingbusiness.org)

Inflation Rate

Inflation rate in Portugal from the year 2000 to 2008 was almost constant. The country witnessed the rate of inflation in January at the rate of 3.6% which was higher than the previous years. In 2009, the country had a deflationary phase when it had the interest rate in negative territory at -0.9% and in 2010 it was 1.4%.

(Source: Central Bank)

FDI Inflow

Foreign Direct Investments inflows have increased since mid-1980s after the government had taken various measures to open its economy for FDIs which has helped to generate employment and helped in the development in the country. The Portugal has more regulations for FDI inflows for the non-EU countries and is relaxed to some extent for EU nations.

The country recorded most FDI in the year 2006 after that the country witnessed a steep decline in FDI inflows for the year 2007, 2008 and 2009.

(Source: World Bank)

Banking sector assets

The table below displays the assets of the Central Bank.

(Source: Central Bank)

Consumer Price Index

Base year; 2008

(Source: National Statistics)

The consumer price index in Portugal has been stable over the past two years. The CPI index was below the 100 mark till February 2010. The CPI index has been continuously increasing since February 2010, with an exception in August 2010, when the index dipped marginally.

Interest rates on saving deposits / time deposits

(Source: National Statistics, Central Bank)

Government expenditure

In the year 2009, government expenditure in Portugal was EUR 83,531 million as compared to government expenditure of EUR 76,683 million in 2008. The government reported deficit in EUR 4,705 million in 2008 and EUR 15,426 million in the year 2009.

(Source: Central Bank)

Official exchange rate 2010

Euro per dollar rate for the year 2010 was registered at 1.3661. The exchange rate for 2009 was 1.4614 Euro per Dollar.

(Source: bof.fi)

Government finances

Sovereign debt dynamics

Total revenue

The country's revenue in 2009 was recorded at EUR 68,106 million, a decrease from EUR 71,978 million which it received in 2008.

(Source: Central Bank)

Tax revenue

Tax revenues in Portugal decreased from EUR 62,359 million for the year 2008 to EUR 58,810 million in the year 2009.

(Source: Central Bank)

Total reserves

Total reserves includes country’s holdings of monetary gold, Special drawing rights, reserves held by the IMF, and holdings of foreign exchange under the control of monetary authorities. For the year 2009 Portugal had USD 15.83 billion of reserves.

(Source: Central Bank)

Current account and capital account (as % of GDP)

Portugal has registered Current Account and Capital Account Deficit.

(Source: Central Bank)

Balance of Payment

(Source: Central Bank)

Labour force in Portugal was recorded at 5.63 million people in 2008. Females accounted for about 56% of the total labour force in 2008.

The unemployment rate in the country increased from 2000 to 2006 but dipped in the year 2007. After 2008, the unemployment level increased to all time high of 10.24 and 11.03 for the year 2009 and 2010 respectively, which was the result of the economic slowdown after 2008.

(Source: Central Bank) 

Total labour force participation rate in Portugal was 52.5% for the year 2009. For females, the participation rate was 69.0% while for males it was 78.5%.

For the year 2009, the country had a total labour force of 5.58 million of which male accounted for 2.95 million and females 2.63 million.

Total Unemployment by sector:

• Agriculture and Fishing – 565,000
• Manufacturing, construction, energy and water – 1,426,000
• Services – 3,064,000

The country labour regulations are inflexible. The non-salary cost of employing a worker is high, and dismissing an employee is difficult. Regulations on work hours are not flexible. These regulations are in the favour of the labour force.

(Source: Central Bank)

Minimum wage

Minimum wage limits prevailing in the country in the year 2010 were EUR 554 per month.

(Source: Eurostat)

Level of unionisation

The major labour unions in the country include:

• General Confederation of Portuguese Workers - (CGTP)
• General Workers' Union (UGT)

(Source: fedee)

?

?

Education

The adult literacy rate for the population aged 15 and above in the year 2007 was 94.9%.

(Source: UNDP)

Education in Portugal is regulated by Ministry of Education and the Ministry of Science, Technology and Higher Education.

Health care

The National Health Service is run by the Ministry of Health in the country. The employees contribute to the national health system from their salaries. Health care cover is provided by general social security scheme.

The Portuguese health system has three coexisting systems:

·         The National Health Service (NHS)

·         Special social health insurance schemes for certain professions (health subsystems)

·         Voluntary private health insurance

The NHS provides universal coverage. The NHS is generally funded through public taxation.

The country had a total of 189 hospitals with a capacity of 35,762 beds and 835 operating rooms. The 2009 statistics indicate that the country had 3.8 doctors and 5.6 nurses per 1000 persons.

Major reasons of mortality are identified as the non-communicable diseases and cardiovascular diseases. The two major causes of deaths were diseases of circulatory system and malignant neoplasm recording 3.1 and 2.3 deaths per 1000 inhabitants in 2009.

The government of Portugal has taken initiative to collaborate public and private Entities in the health care sector by financing of hospital units with private sector participation.

The total expenditure on health in 2006 was 10% of the country’s GDP.

(Source:National Statistics,WHO)

Portugal has a well developed transport system. The country has subway systems in metropolitan areas.  In Portugal, tram services is one of the oldest mode of public transportation. Major cities and towns in the country have their own local transportation network and taxi services.

In 2009, the length of total road network in Portugal was 13,112 km, which is divided into 2,199 km for main roads, 1,543 km for complementary routes and 4,939 km for national roads.

(Source: National Statistics)

Ports

Major ports in Portugal are – Angra do Heroismo, Aveiro, Corvo, Douro, Faro, Figueira Da Foz, Funchal, Horta,   Lagoa, Lagos, Lajes Das Flores, Leixoes, Lisbon, Madalena , Olhao, Ponta Delgada, Portimao, Porto, Porto Santo, Povoa de Varzim, Praia Da Vitoria, Santa Cruz Da Graciosa, Santa Cruz Das Flores, Setubal, Sines, Viana do Castelo, Vila do Conde, Vila Do Porto, Vila Real de Santo Antonio.

(Source: world port source)

Airports

The major international airports in the country are Lisbon, Porto, Faro, Funchal and Ponta Delgada. Other airports in the country include:

(Source: Air charter world)

Telecommunications networks

In 2009, 56% of households had a computer, which was 6.2 p.p. more than in the previous year and 13.5 p.p. more than in 2005. 47.9% of households had internet access (46.0% in 2008), and over 46.0% had broadband internet access (around 39.0% in 2008). According to figures from ITU, Portugal had 1,975,700 internet users in 2009 or 48.27 users per 100 inhabitants. 

(Source: National Statistics)

(Source: National Statistics)