With a new political cycle about to begin, many analysts question how long the period of economic stability in Portugal will last after Sunday's elections.
In the international press, Portugal is generally described as a success story in the eurozone after taking deep austerity measures to recover from the sovereign debt crisis, with above-average growth rates recorded over the past two years. However, its recent economic conquest is largely due to high levels of exports, which may change due to the high rates imposed by the US on the European Union this week.
CNBC made an analysis of economic growth in Portugal, two days before the Portuguese went to the polls. Ana Andrade, Economist Intelligence Unit analyst, was one of the interviewees on this analysis and said that “Portugal is more exposed [ao comércio global] than before the crisis. The share of exports has increased. Portugal is [agora] more integrated into the global trading system, ”he said.
In 2010, a year before applying for financial assistance from the International Monetary Fund (IMF) and the EU, Portugal, it exported around 37.3 billion euros. Since then, exports have increased almost every year, reaching about 58 billion euros in 2018, according to preliminary data. Portuguese exports accounted for more than 40% of the country's growth rate in 2018, compared with almost 30% in 2010, according to CNBC.
"While the Portuguese economy is projected to grow faster than the eurozone, a stronger than expected global and European recession will expose the persistent underlying macroeconomic imbalances," said Michiel van der Veen, economist at RaboResearch. Forecasts point to a growth rate of 1.7% in 2019 and 1.2% in 2020, as Portugal grew 2.8% in 2017 and 2.1% in 2018.
Sunday elections may change stability scenario
On Sunday the Portuguese are called to the polls to vote for the next government and prime minister. Surveys indicate unequivocally that António Costa's PS will be reelected, but the real question is whether reelection will be with an absolute majority or not.
"It will depend on the type of government that is formed, but I would expect a substantial degree of political continuity in the absence of economic shocks," Antonio Barroso, director of the Teneo research firm, told CNBC when asked what influence PS might have on growth. economic.
“Antonio Costa, the socialist leader and current prime minister, has promised to continue reducing the country's public debt. It grew substantially after the debt crisis, which peaked at 130% of GDP (gross domestic product) in 2014, ”says CNBC. "Costa's program says the goal is to bring the current 120 percent of debt to GDP closer to 100 percent of GDP by the end of the next term in 2023."
"To meet fiscal targets, Costa will depend on continued economic growth," van der Veen of RaboResearch told the news site. "However, economic growth may have difficulty keeping pace as the US-China trade war is in full swing and the euro area economy slows down," he explained.
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