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{{Economy of Portugal table}}
{{Infobox Economy
|country = Portugal
|image = Pavilhão de Portugal 4.JPG
|width = 250
|caption = Portuguese One Euro coin
|currency = 1 [[Euro]] = 100 eurocent
|year = Calendar year
|organs = [[EU]], [[WTO]] and [[OECD]]
|rank = 40th
|gdp = $229.881 billion ({{As of|2006|alt=2006}})
|growth = 1.9% (year {{As of|2007|alt=2007}})
|rank = 34th
|per capita = $22,677 ({{As of|2006|alt=2006}} est.)
|sectors = agriculture (5.3%), manufacturing (27.4%), services (67.3%) ({{As of|2005|alt=2005}})
|inflation = 2.3% ({{As of|2005|alt=2005}})
|labor = 5.52 million ({{As of|2005|alt=2005}})
|occupations = services (60%), manufacturing (30%), agriculture (10%) ({{As of|1999|alt=1999}} est.)
|unemployment = 7.6% ({{As of|2005|alt=2005}})
|industries = textiles and footwear; wood pulp, paper, and cork; metals and metalworking; oil refining; chemicals; fish canning; rubber and plastic products; ceramics; electronics and communications equipment; rail transportation equipment; aerospace equipment; ship construction and refurbishment; wine; tourism
|exports = $38.8 billion f.o.b ({{As of|2005|alt=2005}} est.)
|export-goods = clothing and footwear, machinery, chemicals, cork and paper products, hides
|export-partners = [[Spain]] 29%, [[Germany]] 13.4%, [[France]] 8.5%, [[Italy]] 5.2%, [[Netherlands]] 4.3%, [[UK]] 4.2% ({{As of|2005|alt=2005}})
|imports = $60.35 billion f.o.b. ({{As of|2005|alt=2005}} est.)
|import-goods = machinery and transport equipment, chemicals, petroleum, textiles, agricultural products
|import-partners = [[United Kingdom|UK]] 36.8%, [[United States]] 13.8%, [[Germany]] 9.1%, [[Netherlands]] 4.5% ({{As of|2005|alt=2005}})
|revenue = $78.84 billion ({{As of|2005|alt=2005}})
|expenses = $90.27 billion ({{As of|2005|alt=2005}})
|aid = ''donor'': [[Official Development Assistance|ODA]], $271 million ({{As of|1995|alt=1995}})
|cianame = po
}}
The '''Economy of [[Portugal]]''' is a [[high income country|high income]] [[mixed economy|mixed]] [[economy]]. Although being very high by world's average standards, Portugal remains the country with the lowest per capita GDP in [[Western Europe]] and is among the [[Economy of the European Union|least wealthy in the European Union]].<ref name="economia.publico.clix.pt">{{pt icon}} [http://economia.publico.clix.pt/noticia.aspx?id=1352732&idCanal=57 Portugueses perderam poder de compra entre 2005 e 2007 e estão na cauda da Zona Euro], [[Público]] (December 11, 2008)</ref> The [[Global Competitiveness Report]] 2008-2009 edition placed [[Portugal]] in the 43rd position out of 134 countries and territories.<ref name="World Economic Forum">{{cite web |url=http://www.weforum.org/pdf/gcr/2008/rankings.pdf |title=The Global Competitiveness Index rankings |accessdate=2009-03-20 |work= |publisher=World Economic Forum |date= }}</ref>


Research about [[quality of life]] by the [[Economist Intelligence Unit]]'s quality of life survey placed Portugal as the country with the 19th-best quality of life in the world for the year 2005, ahead of other economically and technologically advanced countries like [[France]], [[Germany]], the [[United Kingdom]] and [[South Korea]], but 9 places behind its only neighbour, [[Spain]].<ref>http://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf</ref>
The '''Economy of Portugal''' is a [[high income country|high income]] [[mixed economy|mixed]] [[economy]]. The [[Global Competitiveness Report]] 2008-2009 edition placed [[Portugal]] in the 43rd position out of 134 countries and territories.<ref name="World Economic Forum">{{cite web |url=http://www.weforum.org/pdf/gcr/2008/rankings.pdf |title=The Global Competitiveness Index rankings |accessdate=2009-03-20 |work= |publisher=World Economic Forum |date= }}</ref>
In the 2000s, the Czech Republic, Greece, Malta, Slovakia and Slovenia have all overtaken Portugal in terms of GDP per head. Portuguese GDP per head has fallen from just over 80% of the EU 25 average in 1999 to just over 70% in 2007. This poor performance of the Portuguese economy was explored in April 2007 by [[The Economist]] which described Portugal as "a new [[sick man of Europe]]".<ref name="sick man">"A new sick man of Europe", [[The Economist]], 2007-04-14. http://www.economist.com/world/europe/displaystory.cfm?story_id=9009032</ref> From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).<ref name="destak.pt">Luis Miguel Mota, [http://www.destak.pt/artigos.php?art=11796 População desempregada aumentou 65% em cinco anos], Destak.pt (6th June 2008)</ref>


Corruption has become an issue of major political and economic significance for the country. Some cases are well known and were widely reported in the [[News media|media]], such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power.<ref>[http://euobserver.com/9/28120 Eurojust chief embroiled in Portuguese corruption scandal], euobserver.com (May 13, 2009)</ref><ref>[http://q208.wordpress.com/2008/03/29/reportagem-da-al-jazeera-sobre-portugal-um-dos-paises-mais-pobres-e-corruptos-da-europa People & Power, Al Jazeera], [[Al Jazeera]] (March 2008)</ref>
The major industries include: oil, [[petrochemistry]], [[cement]] production, [[automotive]] and [[shipbuilding|ship industries]], [[electrical]] and [[electronics]] industries, [[machinery]], [[pulp and paper industry]], [[injection moulding]], [[textile]], [[footwear]], [[leather]], [[furniture]], [[ceramic]]s, [[beverages]] and [[food industry]] and [[cork (material)|cork]] (world's largest producer). Manufacturing accounts for 33% of exports. Portugal is the world's fifth-largest producer of [[tungsten]], and the world's eighth-largest producer of [[wine]].

The [[tertiary sector]] has grown, producing 66% of the [[GDP]] and providing jobs for 52% of the working population. The most significant growth rates are found in the [[trade]] sector, due to the introduction of modern means of distribution, transport and telecommunications. [[Financial]] tertiary have benefited from [[privatisation]], also gaining in terms of efficiency. [[Tourism in Portugal|Tourism]] has developed significantly and generates approximately 5% of the wealth produced in Portugal. [[Fishing in Portugal|Fisheries]] and [[Agriculture in Portugal|agriculture]] now account for about 4% of the GDP.

Most imports come from the [[European Union]] countries of [[Spain]], [[Germany]], [[France]], [[Italy]], and the [[United Kingdom]]. Most exports also go to other European Union member states.

Although being very high by world's average standards, Portugal's [[GDP per capita]] is among the lowest in [[Western Europe]]. It was in 19 th place of the 27 member states of the European Union by [[purchasing power]], for the period 2005-2007, and according to the [[Eurostat]].<ref>{{pt icon}} [http://economia.publico.clix.pt/noticia.aspx?id=1352732&idCanal=57 Portugueses perderam poder de compra entre 2005 e 2007 e estão na cauda da Zona Euro], [[Público]] (December 11, 2008)</ref> However, research about [[quality of life]] by the [[Economist Intelligence Unit]]'s (EIU) [http://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf Quality-of-life Survey] placed Portugal as the country with the [[Quality-of-life index|19th-best quality of life]] in the world for 2005, ahead of other economically and technologically advanced countries like [[France]], [[Germany]], the [[United Kingdom]] and [[South Korea]], but 9 places behind its only neighbour, [[Spain]]. Portugal's [[central bank]] is the ''[[Banco de Portugal]]'', which is an integral part of the [[European System of Central Banks]].


==History==
==History==
{{main|Economic history of Portugal}}
{{Main|Economic history of Portugal}}
Portuguese economic growth in the period 1950-1973 created an opportunity for real integration with the developed economies of Western Europe. Through emigration, trade, tourism and foreign investment, individuals and firms changed their patterns of production and consumption, bringing about a structural transformation. Simultaneously, the increasing complexity of a growing economy raised new technical and organizational challenges, stimulating the formation of modern professional and management teams.<ref>[http://ideas.repec.org/p/ave/wpaper/382006.html], Joaquim da Costa Leite ([[Aveiro University]]) - Instituições, Gestão e Crescimento Económico: Portugal, 1950-1973</ref><ref name="sedes.pt">{{pt icon}} [http://www.sedes.pt/conteudo.aspx?args=1,2 Fundação da SEDES - As primeiras motivações], "Nos anos 60 e até 1973 teve lugar, provavelmente, o mais rápido período de crescimento económico da nossa História, traduzido na industrialização, na expansão do turismo, no comércio com a EFTA, no desenvolvimento dos sectores financeiros, investimento estrangeiro e grandes projectos de infra-estruturas. Em consequência, os indicadores de rendimentos e consumo acompanham essa evolução, reforçados ainda pelas remessas de emigrantes.", [[SEDES]]</ref>
===Portuguese Colonial Empire===
During the [[Portuguese Empire]] period, started in the 15th century, until the [[Carnation Revolution]] of 1974, the economy of Portugal was centered in [[trade]] and [[raw material]]s related activities within its vast [[Colonialism|colonial]] possessions, mainly in [[Asia]] ([[spice]]s, [[silk]], [[dye]]s, [[porcelain]] and [[gem]]s), [[Africa]] ([[ivory]], [[timber]], [[oil]] and [[diamonds]]) and [[South America]] ([[sugar cane]], [[dye]]s, [[wood]]s and [[gold]]). The country, with a transcontinental empire with plenty of natural resources and vast unexploited areas, was among the most powerful nations in the world. In 1822, the Portuguese [[colony of Brazil]] became an independent country, however, until 1974, Portugal managed to preserve its colonies/overseas territories in Africa, which included [[Portuguese Angola|Angola]] and [[Portuguese Mozambique|Mozambique]], territories that would experience high rates of economic growth and unmatched levels of development until the departure of the Portuguese in 1975.


Portugal changed its political regime in 1974 due to the [[Carnation Revolution]], culminating with the end of one of its most notable [[Economic history of Portugal|periods of economic growth]], which had started in the 1960s.<ref name="sedes.pt"/> In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained just during the worst revolutionary period.<ref>[http://countrystudies.us/portugal/64.htm Economic Growth and Change], [[U.S. Library of Congress]], countrystudies.us</ref>
After a long period of economic divergence before 1914, the Portuguese economy recovered slightly until 1950, entering thereafter on a path of strong economic convergence. Portuguese economic growth in the period 1950-1973 created an opportunity for real integration with the developed economies of Western Europe. Through emigration, trade, tourism and foreign investment, individuals and firms changed their patterns of production and consumption, bringing about a structural transformation. Simultaneously, the increasing complexity of a growing economy raised new technical and organizational challenges, stimulating the formation of modern professional and management teams.<ref>[http://ideas.repec.org/p/ave/wpaper/382006.html], Joaquim da Costa Leite ([[Aveiro University]]) - Instituições, Gestão e Crescimento Económico: Portugal, 1950-1973</ref><ref>{{pt icon}} [http://www.sedes.pt/conteudo.aspx?args=1,2 Fundação da SEDES - As primeiras motivações], "Nos anos 60 e até 1973 teve lugar, provavelmente, o mais rápido período de crescimento económico da nossa História, traduzido na industrialização, na expansão do turismo, no comércio com a EFTA, no desenvolvimento dos sectores financeiros, investimento estrangeiro e grandes projectos de infra-estruturas. Em consequência, os indicadores de rendimentos e consumo acompanham essa evolução, reforçados ainda pelas remessas de emigrantes.", [[SEDES]]</ref>


Subsequent poor performance of the Portuguese economy was explored in April 2007 by [[The Economist]] which described [[Portugal]] as "a new [[sick man of Europe]]".<ref name="sick man"/> From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).<ref name="destak.pt"/>
===The military coup of 1974===
The post [[Carnation Revolution]] period was characterized by chaos and negative economic growth as industries were nationalised and the negative effects of the decoupling of Portugal from its former territories were felt. Heavy industry came to an abrubt halt. All sectors of the economy from manufacturing, mining, chemical, defence, finance, agriculture and fishing went into free fall. Portugal found itself overnight going from the country in [[Western Europe]] with the highest growth rate to the lowest - in fact it experienced several years of negative growth. This was amplified by the mass emigration of skilled workers and enterpreneurs due to political intimidation, and the costs of accommodating in Portugal thousands of refugees from the former overseas provinces in Africa - the ''retornados''.


Portuguese subsidiaries of large [[multinational companies]], such as [[Microsoft|Microsoft Portugal]],<ref>[http://www.microsoft.com/portugal/presspass/press/2008/jul08/07-22msftmelhorsub.mspx Microsoft Portugal novamente eleita melhor Subsidiária mundial da Microsoft International em 2008]</ref> are still ranked among its most productive in the world for its continued high [[Productivity (economics)|productivity]] records. A Siemens executive, Carlos de Melo Ribeiro, pointed to labor costs and productivity as major reasons why shipping semiconductors to Portugal for final production is more advantageous than retaining the work in Germany or Britain.<ref>Siemens Builds on Long History in Portugal, to the Benefit of Both, By Karen E. Thuermer, October, 1997, in Keller Publishing [http://www.glscs.com/archives/10.97.Siemens.htm?adcode=90]</ref>{{Verify source|date=September 2009}}<ref>[http://www.investinportugal.pt/MCMSAPI/HomePage/PortugalToday/PortugalAdvantages/CostCompetitiveQualifiedAndFlexibleWorkforce/ "The investment made in Portugal by the VW group has enabled “this plant to become one of the best in the VW Group and indeed in the whole automotive industry in terms of quality, productivity, absenteeism, safety, and many other decisive criteria”, Gerd Heuss upon the manufacturing of car nº 1 million in Palmela", June 2003.], AICEP - Business Development Agency</ref>{{Verify credibility|date=September 2009}}
After the [[Carnation Revolution]]'s turmoil of 1974, the Portuguese economic basis changed deeply. The Portuguese economy had changed significantly by 1973 prior to the leftist military coup, compared with its position in 1961 - total output (GDP at factor cost) had grown by 120 percent in real terms. Clearly, the pre-revolutionary period was characterized by robust annual growth rates for GDP (6.9 percent), industrial production (9 percent), private consumption (6.5 percent), and gross fixed capital formation (7.8 percent).


==Sectors==
In 1960, at the initiation of Salazar's more outward-looking economic policy, Portugal's per capita GDP was only 38 percent of the EC-12 average; by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, on the eve of the revolution, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average. In 1975, the year of maximum revolutionary turmoil, Portugal's per capita GDP declined to 52.3 percent of the EC-12 average. Convergence of real GDP growth toward the EC average occurred as a result of Portugal's economic resurgence since 1985. In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained just during the worst revolutionary period.<ref>[http://countrystudies.us/portugal/64.htm Economic Growth and Change], [[U.S. Library of Congress]], countrystudies.us</ref>
Business services have overtaken more traditional industries such as textiles, clothing, footwear, cork (of which Portugal is the world's leading producer).<ref>''Grande Enciclopédia Universal'', p. 10543, "Portugal", para. 4</ref> and wood products and beverages.<ref name="autogenerated1">[http://www.ft.com/reports/investportugal2008 Investing in Portugal Report], [[Financial Times]]</ref> At present, Portugal is exporting more technology than it imports.<ref name="autogenerated1" />


Portugal has a strong tradition in the [[fisheries]] sector and is one of the countries with the highest fish consumption per capita.<ref>{{pt icon}} PESSOA, M.F.; MENDES, B.; OLIVEIRA, J.S. [http://igbp-portugal.org/cluster2006/comunicacoes/m_f_pessoa/cluster2006-zc06c-comun.pdf CULTURAS MARINHAS EM PORTUGAL], "O consumo médio anual em produtos do mar pela população portuguesa, estima-se em cerca de 58,5 kg/ por habitante sendo, por isso, o maior consumidor em produtos marinhos da Europa e um dos quatro países a nível mundial com uma dieta à base de produtos do mar."</ref>
The growth rate of Portuguese merchandise exports during the period 1959 to 1973 was notable - 11 percent per annum. In 1960 the bulk of exports was accounted for by a few products - canned fish, raw and manufactured cork, cotton textiles, and wine. By contrast, in the early 1970s (before the 1974 military coup), Portugal's export list reflected significant product diversification, including both consumer and capital goods. Several branches of Portuguese industry became export-oriented, and in 1973 over one-fifth of Portuguese manufactured output was exported.


Travel and tourism will continue to be extremely important for Portugal, with visitor numbers forecast to increase significantly over the next five years. However, there is increasing competition from [[Eastern Europe]]an destinations such as [[Croatia]] who offer similar attractions to Portugal, and are often cheaper. Portugal must keep its focus on its niche attractions such as health, nature and rural tourism to stay ahead of its competitors.<ref>[http://www.euromonitor.com/Travel_and_Tourism_in_Portugal], [[Euromonitor International]]</ref>
There was a 16-percentage-point increase in the participation of the services sector from 39 percent of GDP in 1973 to 55.5 percent in 1990. Most of this growth reflected the exacerbated proliferation of [[civil service]] employment and the associated cost of [[public administration]], together with the contribution of [[tourism]] services during the 1980s to the detriment of more sustainable and reproductive activities like manufacturing, exporting and technology/capital-intensive industries.


[[Alverca]], [[Covilhã]],<ref>{{pt icon}} [http://noticias.sapo.pt/lusa/artigo/3010ee885ea3612ea6bfc1.html Covilhã: Aleia vai montar avião até agora vendido em kit e jactos portugueses em 2011], 14th April 2008</ref> [[Évora]],<ref>{{pt icon}} [http://diariodigital.sapo.pt/dinheiro_digital/news.asp?section_id=6&id_news=103403 Évora aprova isenções fiscais aos projectos da Embraer], [[Diário Digital]] (22nd August 2008)</ref> and [[Ponte de Sor]] are the main centres of the Portuguese [[aerospace industry]].
===EU membership===
Membership in the [[European Union]] (EU), achieved in 1986, contributed to stable [[economic growth]] and [[economic development|development]], largely through increased [[trade]] ties and an inflow of [[Structural Funds and Cohesion Funds|funds]] allocated by the European Union to improve the country's infrastructure. After a [[recession]] in 1993, the economy grew at an average annual rate of 3.3%, well above EU averages but well behind the growth of the Portuguese economy before the military coup of 1974. In order to qualify for the Economic and Monetary Union (EMU), Portugal agreed to cut its fiscal deficit and undertake structural reforms. The EMU brought to Portugal exchange rate stability, falling inflation, and falling interest rates. Falling interest rates, in turn, lowered the cost of public debt and helped the country achieve its fiscal targets.
[[Image:Euro banknotes.png|thumb| In 2002 Portugal introduced the single European currency, the [[euro]]. With 14 other EU member states it forms the [[Eurozone]].]]
In 1999, it continued to enjoy sturdy economic growth, falling [[interest]] rates, and low [[unemployment]]. The country qualified for the [[Economic and Monetary Union of the European Union]] (EMU) in 1998 and joined with 10 other European countries in launching the [[euro]] on [[January 1]], 1999. The three different designs chosen for the national side of the Portuguese euro coins were drawn by the artist Vitor Manuel Fernandes dos Santos. The inspiration came from the three seals of the first king, [[Dom Afonso Henriques]]. Portugal's inflation rate for 1999, 2.4%, was comfortably low.


The [[insurance]] sector has performed well, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting [[risk]]s, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.<ref>[http://www.imf.org/external/pubs/ft/scr/2006/cr06378.pdf Portugal: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Securities Regulation, and Insurance Regulation], [[International Monetary Fund|IMF]], (October 2006)</ref>
Household debt has expanded rapidly. The [[European Commission]], [[OECD]], and others have advised the Portuguese Government to exercise more fiscal restraint. Portugal's public deficit exceeded 3% of GNP in 2001, the EU's self-imposed limit, and left the country open to either EU sanctions or tighter financial supervision. The overall rate of growth slowed in late 2001 and into 2002, making fiscal austerity that much more painful to implement.


=== Energy ===
Portugal has made significant progress in raising its standard of living to that of its EU partners. GDP per capita on a purchasing power parity basis rose from 51% of the EU average in 1985 to 78% in early 2002. By 2005 this had dropped to 72% (of the average across all of now 25 EU members, including seven with GDP per capita lower than Portugal) as GDP per capita rose in other EU countries. [[Unemployment]] stood at 4.1% at the end of 2001, which was low compared to the EU average.
{{Main|Renewable energy in Portugal}}
[[File:Alqueva dam portugal.jpg|thumb|[[Alqueva Dam]], [[Alentejo]]. A [[hydroelectric power]] generation facility which created the largest artificial lake in Western Europe.]]
In 2006 the world's largest [[solar energy|solar power]] plant began operating in the nation's sunny south while the world's first commercial [[wave power]] farm opened in October 2006 in the [[Norte region]]. As of 2006, 66% of electricity production was from coal and fuel power plants. A total of 29% was produced by [[hydroelectric]]s and 6% by [[wind energy]]
<ref>{{cite web |url=http://www.iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=PT |title=IEA Energy Statistics: Portugal |accessdate=2009-04-07 |work= |publisher=[[International Energy Agency]] |date=2006 }}</ref>. In 2008, up to 43% of the electricity consumed in the country had been produced through the renewable energies, even though the hydroelectric production had decreased due to the dryness that affected the country.<ref>{{cite news |url=http://diariodigital.sapo.pt/news.asp?section_id=114&id_news=381941 |title=Fontes renováveis originaram 43% da electricidade consumida |work=Diário Digital |author=Staff |date=2009-04-08 |language=Portuguese|accessdate=2009-04-17}}</ref>


==Labour==
GDP growth in 2006, at 1.3%, was the lowest not just in the European Union but in all of Europe. In the 2000s, the Czech Republic, Greece, Malta, Slovakia and Slovenia have all overtaken Portugal in terms of GDP per head. And Portuguese GDP per head has fallen from just over 80% of the EU 25 average in 1999 to just over 70% in 2007. This poor performance of the Portuguese economy was explored in April 2007 by [[The Economist]] which described [[Portugal]] as "a new [[sick man of Europe]]".<ref name="sick man">"A new sick man of Europe", [[The Economist]], 2007-04-14. http://www.economist.com/world/europe/displaystory.cfm?story_id=9009032</ref> From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).<ref>Luis Miguel Mota, [http://www.destak.pt/artigos.php?art=11796 População desempregada aumentou 65% em cinco anos], Destak.pt (6th June 2008)</ref>
Officially, in 2008 the unemployment decreased to 7.3% in the second quarter of 2008.<ref name = "unemployment">{{pt icon}} [http://economia.publico.clix.pt/noticia.aspx?id=1338969 Taxa de desemprego desce para 7,3 por cento no segundo trimestre], [[Público]] (14th August 2008)</ref> In 2008, about 8% of the [[graduate unemployment|people with a degree were unemployed]], and a much larger proportion were [[underemployed]].<ref name = "graduate unemployment">{{pt icon}} [http://diariodigital.sapo.pt/news.asp?id_news=319351 Licenciados desempregados mais do que duplicaram desde 2002], [[Diário Digital]] (19th February 2008)</ref> Nearly 60,000 people with an academic degree are unemployed in Portugal.<ref name = "graduate unemployment"/> According to [[Eurostat]], Portugal was the 6th poorest country of the 27 member states of the European Union by [[purchasing power]], for the period 2005-2007.<ref name="economia.publico.clix.pt"/> The last European survey of workers, published in 2007 and which formed the basis of this 2009 research study showed that Portugal is the 5th European country with lower quality of work.<ref>{{pt icon}} [http://www.destak.pt/artigos.php?art=30886 Portugal é um dos países com pior qualidade de emprego], [[Destak.pt]] (May 28, 2009).</ref>


==Competitiveness by city==
However, the Portuguese subsidiaries of large [[multinational companies]], such as [[Siemens AG|Siemens Portugal]], [[Volkswagen|Volkswagen Autoeuropa]], [[Qimonda|Qimonda Portugal]], [[IKEA]], [[Nestlé|Nestlé Portugal]], [[Microsoft|Microsoft Portugal]],<ref>[http://www.microsoft.com/portugal/presspass/press/2008/jul08/07-22msftmelhorsub.mspx Microsoft Portugal novamente eleita melhor Subsidiária mundial da Microsoft International em 2008]</ref> [[Unilever]]/[[Jerónimo Martins]] and [[Danone|Danone Portugal]], are still ranked among its most productive in the world for its continued high [[Productivity (economics)|productivity]] records.<ref> A Siemens executive, Carlos de Melo Ribeiro, pointed to labor costs and productivity as major reasons why shipping semiconductors to Portugal for final production is more advantageous than retaining the work in Germany or Britain - Siemens Builds on Long History in Portugal, to the Benefit of Both, By Karen E. Thuermer, October, 1997, in Keller Publishing [http://www.glscs.com/archives/10.97.Siemens.htm?adcode=90]</ref><ref>[http://www.investinportugal.pt/MCMSAPI/HomePage/PortugalToday/PortugalAdvantages/CostCompetitiveQualifiedAndFlexibleWorkforce/ "The investment made in Portugal by the VW group has enabled “this plant to become one of the best in the VW Group and indeed in the whole automotive industry in terms of quality, productivity, absenteeism, safety, and many other decisive criteria”, Gerd Heuss upon the manufacturing of car nº 1 million in Palmela", June 2003.], AICEP - Business Development Agency</ref> Many Portuguese companies have grown and expanded internationally since after 1986. Among the most notable Portugal-based global companies are [[SONAE]], [[Amorim]], [[Sogrape]], [[EFACEC]], [[Portugal Telecom]], [[Jerónimo Martins]], [[Cimpor]], [[Unicer]], [[Millennium bcp]], [[Lactogal]], [[Sumolis]], [[Critical Software]], [[Galp Energia]], [[EDP]], [[Renova (brand)|Renova]], [[Teixeira Duarte]], [[Soares da Costa]], [[Portucel Soporcel]], [[Simoldes]], [[Iberomoldes]] and [[Logoplaste]].
A study concerning [[competitiveness]] of the 18 Portuguese district capitals, complying with [[World Economic Forum]] methodology, was made by [[Minho University]] economics researchers. It was published in [[Público]] newspaper on 30 September 2006. The best-ranked cities in the study were [[Évora]], [[Lisbon]] and [[Coimbra]].<ref>[http://jornal.publico.clix.pt/default.asp?a=2006&m=09&d=30&uid={456842A6-9631-4CC3-9C5F-E84A6AEEB13C}&sid=11039]</ref><ref>[http://www.publico.clix.pt/shownews.asp?id=1271886&idCanal=63], [http://diariodigital.sapo.pt/dinheiro_digital/news.asp?section_id=2&id_news=72198]</ref>

==Employment and wages==
Although unemployment is just over 9% today, the number of unemployed people has increased since 2000.

As of May 2006, over 420,000 people were unemployed in Portugal. The [[unemployment]] rate in the country was 7.7%. In 2007 the unemployment rate reached 8.4%, the highest unemployment rate in Portugal since 1987. The average European Union unemployment rate decreased to a record low of 7.3% in 2007. In the Portuguese sub-region of [[Ave, Subregion|Vale do Ave]], the unemployment rate has reached 15%, and in the [[Península de Setúbal]] sub-region 12.5%.

Officially, in 2008 the unemployment decreased to 7.3% in the second quarter of 2008.<ref name = "unemployment">{{pt icon}} [http://economia.publico.clix.pt/noticia.aspx?id=1338969 Taxa de desemprego desce para 7,3 por cento no segundo trimestre], [[Público]] (14th August 2008)</ref> However, it immediately rose again to higher rates.

Portugal has the lowest [[GDP per capita]] in [[Western Europe]] and is among the [[Economy of the European Union|poorest member states of the European Union]]. It was the 6th poorest country of the 27 member states of the European Union by [[purchasing power]], for the period 2005-2007, and according to the [[Eurostat]].<ref>{{pt icon}} [http://economia.publico.clix.pt/noticia.aspx?id=1352732&idCanal=57 Portugueses perderam poder de compra entre 2005 e 2007 e estão na cauda da Zona Euro], [[Público]] (December 11, 2008)</ref>

Maria da Conceição Cerdeira, one of the authors of a published research study made by the [[Technical University of Lisbon]]'s ISEG (''Instituto Superior de Economia e Gestão''), explained that "in a generic way, there is not a high intensity of work, or a great psychological pressure" in Portugal, for the mass of common ordinary workers, unlike what happens in [[Northern Europe]] or [[North America]]. Less pressure does not mean, however, a better job. The last European survey of workers, published in 2007 and which formed the basis of this 2009 research study showed that Portugal is the 5th European country with lower quality of work.<ref>{{pt icon}} [http://www.destak.pt/artigos.php?art=30886 Portugal é um dos países com pior qualidade de emprego], [[Destak.pt]] (May 28, 2009).</ref>

===Wages===
The average wage in Portugal is 804.22€ per month, and the [[minimum wage]], which is regulated by law, is 450€ per month.

===Graduate unemployment===
In 2008, about 8%<ref name = "graduate unemployment">{{pt icon}} [http://diariodigital.sapo.pt/news.asp?id_news=319351 Licenciados desempregados mais do que duplicaram desde 2002], [[Diário Digital]] (19th February 2008)</ref> of the [[graduate unemployment|people with a degree were unemployed]], and a much larger proportion were [[underemployed]]. This directly was correlated with a general lack of [[employability]] and student preparation for the workplace seen among many courses in a number of fields offered by certain higher education institutions or departments. The implementation of the [[Bologna process]] and other educational reforms, such as the compulsory closing of a number of courses, departments, colleges and private universities after 2005 due to a lack of academic rigour and low teaching standards, tried a totally new approach in order to tackle the problem. In 2007 alone, some major private universities were investigated by State agencies and two were immediately closed. In addition, a number of degrees of the public system were also discontinued due to lack of quality, low demand by potential students or scarce interest showed by potential employers in fresh graduates on these fields. [[secondary education|Secondary]] and post-secondary non-higher education (intermediate education - ''ensino médio''), involving technical and vocational education, has been redeveloped since 2007, through the government's policies of the ''XVII Governo Constitucional'' (headed by Prime-Minister [[José Sócrates]]).

Nearly 60,000<ref name = "graduate unemployment"/> people with an academic degree are unemployed in Portugal. This group includes a large proportion of young adults.

==Economy by sector==
[[Image:2006Portuguese exports.PNG|thumb|right|Portuguese exports in 2006]]
[[Fishing in Portugal|Fisheries]] and [[Agriculture in Portugal|agriculture]] now account for about 4% of the [[GDP]], down from approximately 25% in 1960, while still employing 13% of the labour force. On the other hand, the [[tertiary sector]] has grown, producing 66% of the GDP and providing jobs for 52% of the working population. The remaining 30% of the GDP is mainly produced by the building and energy sectors.

===Natural resources===
Natural resources such as forests cover about 34% of the country, namely [[Pinus|pine trees]] (13,500&nbsp;km²), [[Cork Oak]] (6800&nbsp;km²), [[Holm Oak]] (5,340&nbsp;km²), and [[Eucalyptus]] (2,430&nbsp;km²). [[Cork (material)|Cork]] is a major production, Portugal produces half of the world's cork. Significant mining resources are [[tungsten]], [[tin]], and [[uranium]].

===Agriculture and fisheries===
{{Main|Agriculture in Portugal|Fishing in Portugal}}
A considerable part of continental Portugal is dedicated to agriculture, although it does not represent most of the economy. The south has developed an extensive monoculture of cereals and [[olive tree]]s and the [[Douro|Douro Valley]] in [[vineyard]]s. Olive trees (4,000&nbsp;km²; 1,545&nbsp;sq&nbsp;mi), vineyards (3,750&nbsp;km²; 1,450&nbsp;sq&nbsp;mi), [[wheat]] (3,000&nbsp;km²; 1,160&nbsp;sq&nbsp;mi) and [[maize]] (2,680&nbsp;km²; 1,035&nbsp;sq&nbsp;mi) are produced in vast areas. Portuguese [[wine]] and [[olive oil]] are especially praised by nationals for their quality, thus external competition (even at much lower prices) has had little effect on consumer demand. Portugal is a traditional wine grower, and has exported its wines since the dawn of western civilization; [[Port Wine]], ''[[Vinho Verde]]'' and [[Madeira Wine]] are the leading wine exporters. Portugal is also a quality producer of fruits, namely the [[Algarve]] [[orange (fruit)|oranges]], [[cherries]] (large production in [[Cova da Beira]] and [[Alto Alentejo]]), and [[Oeste]] region's ''[[pêra rocha]]'' (a type of [[pear]]). Other exports include horticulture and floriculture products, beet sugar, sunflower oil, [[cork (material)|cork]], and tobacco.

The Portuguese fishing industry is fairly large and diversified. Fishing vessels classified according to the area in which they operate, can be divided into local fishing vessels, coastal fishing vessels and long-distance fishing vessels. The local fleet is mainly composed of small traditional vessels (less than 5 GRT), comprising, in 2004, 87% of the total fishing fleet and accounting for 8% of the total tonnage. These vessels are usually equipped to use more than one fishing method, such as hooks, gill nets and traps, and constitute the so-called polyvalent segment of the fleet. Their physical output is low but reasonable levels of income are attained by virtue of the high commercial value of the species they capture: octopus, black scabbardfish, conger, pouting, hake and anglerfish. Purse seine fishing is also part of the local fleet and has, on the mainland, only one target species: the sardine. This fishery represents 37% of total landings. [[Portugal's Exclusive Economic Zone]] has 1,727,408&nbsp;km². The coastal fishing fleet accounted for only 13% of vessels but had the largest GRT (93%). These vessels operate in areas farther from the coast, and even outside the Portugal's Exclusive Economic Zone. The coastal fishing fleet comprises polyvalent, purse seine and trawl fishing vessels. The trawlers operate only on the mainland shelf and target demersal species such as horse mackerel, blue whiting, octopus and crustaceans. The crustacean trawling fishery targets Norway lobster, red shrimp and deepwater rose shrimp. The most important fish species landed in Portugal in 2004 were sardine, mackerel and horse mackerel, representing 37%, 9% and 8% of total landings by weight, and 13%, 1% and 8% of total value, respectively. Molluscs accounted for only 12% of total landings in weight, but 22% of total landings in value. Crustaceans were 0.6% of the total landings by weight and 5% by value.

===Industry===
The major industries include: [[oil refineries]], [[petrochemistry]], [[cement]] production, [[automotive]] and [[shipbuilding|ship industries]], [[electrical]] and [[electronics]] industries, [[machinery]], [[pulp and paper industry]], [[injection moulding]], [[plastic|plastic products]], [[textile]], [[footwear]], [[leather]], [[furniture]], [[ceramic]]s, [[beverages]] and [[food industry]] and [[cork (material)|cork]] (leader producer). Automotive and other mechanical industries are primarily located in and around [[Setúbal]], [[Porto]], [[Lisbon]], [[Aveiro]], [[Braga]], and [[Santarém, Portugal|Santarém]]. [[Coimbra]] and [[Oeiras]] have growing technological-based industries, including [[pharmaceuticals]] and [[software]]. [[Sines, Portugal|Sines]] is a major [[petrochemical]] centre. [[Maia, Portugal|Maia]] has one of the largest industrial parks of the country, including noted [[wood processing]] and [[food]] industries. [[Figueira da Foz]] is a major centre of [[pulp and paper]] industry. [[Marinha Grande]] is the most reputed [[glass making]] centre of Portugal. [[Leiria]], [[Oliveira de Azeméis]], [[Vale de Cambra]] and [[Viseu]], have important light industries, including [[injection moulding]] and plastics. [[Alverca]], [[Covilhã]],<ref>{{pt icon}} [http://noticias.sapo.pt/lusa/artigo/3010ee885ea3612ea6bfc1.html Covilhã: Aleia vai montar avião até agora vendido em kit e jactos portugueses em 2011], 14th April 2008</ref> [[Évora]],<ref>{{pt icon}} [http://diariodigital.sapo.pt/dinheiro_digital/news.asp?section_id=6&id_news=103403 Évora aprova isenções fiscais aos projectos da Embraer], [[Diário Digital]] (22nd August 2008)</ref> and [[Ponte de Sor]] are the main centres of the Portuguese [[aerospace industry]].

===Services===
The [[tertiary sector]] has grown, producing 66% of the [[GDP]] and providing jobs for 52% of the working population. The most significant growth rates are found in the [[trade]] sector, due to the introduction of modern means of distribution, transport and telecommunications. [[Financial]] tertiary have benefited from [[privatisation]], also gaining in terms of efficiency. [[Tourism]] has developed significantly and generates approximately 5% of the wealth produced in Portugal.

==Financial market==
In the Portuguese [[financial market]], the major [[stock exchange]] is the [[Euronext Lisbon]] which is part of the [[NYSE Euronext]], the first global stock exchange. It is supervised and regulated by the [[Portuguese Securities Market Commission]]. The [[PSI-20]] is Portugal's most selective and widely known [[stock index]]. Portugal's [[central bank]] is the ''[[Banco de Portugal]]'', which is an integral part of the [[European System of Central Banks]]. The largest Portuguese banks are [[Banco Comercial Português]] and the state-owned [[Caixa Geral de Depósitos]]. Portuguese banks hold strategic stakes in other sectors of the economy, including the [[insurance]] sector. Foreign bank participation is relatively high as is state ownership through the Caixa Geral de Depósitos (CGD). Overall, Portugal's financial system is sound, well managed and competitive, with shorter-term risks and vulnerabilities quite well contained, and with the system buttressed by a strong financial policy framework. Despite being relatively small and concentrated, Portugal’s banking system generally compares well with other [[European Union]] (EU) countries in terms of [[economic efficiency|efficiency]], [[profitability]], and [[asset]] quality, with [[solvency]] also close to European levels. Across all the financial sub-sectors, and with particular reference to the larger institutions, supervision of Portuguese financial institutions is active, professional and well organized. The [[insurance]] sector has performed well, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting [[risk]]s, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.<ref>[http://www.imf.org/external/pubs/ft/scr/2006/cr06378.pdf Portugal: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Securities Regulation, and Insurance Regulation], [[International Monetary Fund|IMF]], (October 2006)</ref>

==Competitiveness==
===Portugal's competitiveness in the world===
The [[Global Competitiveness Report]] for 2005, published by the [[World Economic Forum]], placed Portugal on the 22nd position, ahead of countries and territories like [[Spain]], [[Republic of Ireland|Ireland]], [[France]], [[Belgium]] and [[Hong Kong]]. This table showed that Portugal had stepped two places regarding the 2004 ranking. On the Technology index, Portugal was ranked 20th, on the Public Institutions index Portugal was the 15th best and on the Macroeconomic index, Portugal was placed on the 37th position. [http://www.investinportugal.pt/MCMSAPI/HomePage/NewsRoom/PORTUGAL+IMPROVES+ITS+POSITION+IN+THE+WEF+COMPETITIVENESS+RANKING.htm] The Global Competitiveness Index 2007-2008 placed Portugal on the 40th position out of 131 countries and territories.<ref>[http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2007/gcr2007_rankings.pdf Global Competitiveness Index 2007-2008]</ref> However, the Global Competitiveness Report 2008-2009 edition placed Portugal in the 43rd position out of 134 countries and territories.<ref name="World Economic Forum"/>

===Competitiveness by city===
A study concerning [[competitiveness]] of the 18 Portuguese district capitals, complying with [[World Economic Forum]] methodology, was made by [[Minho University]] economics researchers. It was published in [[Público]] newspaper on 30 September 2006. The best-ranked cities in the study were [[Évora]], [[Lisbon]] and [[Coimbra]]. [http://jornal.publico.clix.pt/default.asp?a=2006&m=09&d=30&uid={456842A6-9631-4CC3-9C5F-E84A6AEEB13C}&sid=11039], [http://www.publico.clix.pt/shownews.asp?id=1271886&idCanal=63], [http://diariodigital.sapo.pt/dinheiro_digital/news.asp?section_id=2&id_news=72198]


'''Ranking:'''
'''Ranking:'''

*1.[[Évora]]: 7,293
*1.[[Évora]]: 7,293
*2.[[Lisbon]]: 6,454
*2.[[Lisbon]]: 6,454
Line 97: Line 76:
*4.[[Beja]]: 5,660
*4.[[Beja]]: 5,660
*5.[[Leiria]]: 5,609
*5.[[Leiria]]: 5,609
*6.[[Castelo Branco]]: 5,608
*7.[[Aveiro]]: 5,452
*8.[[Guarda]]: 5,178
*9.[[Santarém, Portugal|Santarém]]: 5,037
*10.[[Portalegre]]: 4,711
*11.[[Viseu]]: 4,628
*12.[[Vila Real]]: 5,514
*13.[[Bragança]]: 4,271
*14.[[Setúbal]]: 4,070
*15.[[Braga]]: 4,055
*16.[[Faro, Portugal|Faro]]: 3,971
*17.[[Viana do Castelo]]: 3,859
*18.[[Porto]]: 3,577

==Domestic problems==
*'''Forest Fires:''' Like in other countries with very hot summers and seasonal drying of soils and vegetation, every year large areas of the Portuguese forest is destroyed. This has an important impact on the economy because many people and industries depend on [[forestry]] related activities. It is also a very dramatic ecological problem and a safety issue for the populations.
*'''Portugal's Public Debt:''' The [[public debt]] exceeds 60% of GDP. This problem is a threat to the Portuguese economy and the State's financial sustainability.
*'''Over-dimensioned Public Sector:''' The public sector has been generally considered a very large, expensive and inefficient part of the economy. An excess of public employees and useless bureaucracy results in the loss of millions of euros every year. Since the ''XVI Governo Constitucional'' government, headed by Prime Minister [[José Durão Barroso]], to the ''XVII Governo Constitucional'' government, headed by Prime Minister [[José Sócrates]] (which created new rules and implemented reforms aiming at better efficiency, rationalized resource allocation, fight civil servant excedentary overcapacity (''excedentários'') and less bureaucracy for both citizens and companies - eg: ''empresa na hora'' [http://www.empresanahora.pt/], ''PRACE - Programa de Reestruturação da Administração Central do Estado'' [http://www.portugal.gov.pt/NR/rdonlyres/0A6DEBBD-BE35-4C4C-91CA-27BCF76E142A/0/Modelo_PRACE.pdf], and SIMPLEX - Programa de Simplificação Administrativa e Legislativa [http://www.ucma.gov.pt/simplex/], among others), the "[[public expenditure]] problem" has been a major concern in Portugal, however it has had little effect so far.
*'''Corruption:''' Although being generally considered an honest hard-working people, corruption has become an issue of major political and economic significance for the Portuguese. The responsible authorities and many civic associations and think tanks are trying to combat corruption before it increases further. Many abusive lobbies and corruption schemes are related to concessions, unclear approvals to contractors and economic groups, or job creation for and commercial agreements with friends and family members, mainly involving the huge public sector and companies. Some cases are well known and were widely reported in the [[News media|media]], such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power.<ref>[http://euobserver.com/9/28120 Eurojust chief embroiled in Portuguese corruption scandal], euobserver.com (May 13, 2009)</ref><ref>[http://q208.wordpress.com/2008/03/29/reportagem-da-al-jazeera-sobre-portugal-um-dos-paises-mais-pobres-e-corruptos-da-europa People & Power, Al Jazeera], [[Al Jazeera]] (March 2008)</ref> According to the 2008 [[Corruption Perceptions Index]] of countries published by [[Transparency International]], Portugal has the 32nd lowest level of corruption, out of 180 countries.

== Education, training and research in business and economic sciences ==
There are several [[Higher education in Portugal|higher education]] institutions awarding academic degrees in [[economics]] and [[business management]] across the whole country. Almost every [[polytechnic (Portugal)|polytechnical institute]] have programmes in management and administration. All [[list of universities in Portugal|state-run universities]] have programmes in economics. Among the largest and most reputed [[university|universities]] which host an economics department and develop research on economics, are the [[Technical University of Lisbon]] (through its ''Instituto Superior de Economia e Gestão'' - ISEG); the [[Portuguese Catholic University]] at Lisbon (through its ''Faculdade de Ciências Económicas e Empresariais'' - FCEE), the [[University of Porto]] (through its ''Faculdade de Economia da Universidade do Porto'' - FEP); the [[New University of Lisbon]] (through its ''Faculdade de Economia da Universidade Nova de Lisboa'' - FEUNL); the [[Minho University]] (through its ''Escola de Economia e Gestão'' - EEG); and the [[University of Coimbra]] (through its ''Faculdade de Economia da Universidade de Coimbra'' - FEUC). Both the [[Bank of Portugal]] and [[Statistics Portugal]] develop lengthy and thoroughly systematic research and make reports on the Portuguese economy.

==See also==
* [[Economy of Europe]]
* [[Portugal]]
* [[Economic history of Portugal]]


== References ==
== References ==
{{reflist}}
{{reflist|2}}


==External links==
==External links==

Revision as of 18:31, 30 September 2009

Economy of Portugal
Portuguese One Euro coin
Currency1 Euro = 100 eurocent
Calendar year
Trade organisations
EU, WTO and OECD
Statistics
GDP$229.881 billion (2006)
GDP growth
1.9% (year 2007)
GDP per capita
$22,677 (2006 est.)
GDP by sector
agriculture (5.3%), manufacturing (27.4%), services (67.3%) (2005)
2.3% (2005)
Labour force
5.52 million (2005)
Labour force by occupation
services (60%), manufacturing (30%), agriculture (10%) (1999 est.)
Unemployment7.6% (2005)
Main industries
textiles and footwear; wood pulp, paper, and cork; metals and metalworking; oil refining; chemicals; fish canning; rubber and plastic products; ceramics; electronics and communications equipment; rail transportation equipment; aerospace equipment; ship construction and refurbishment; wine; tourism
External
Exports$38.8 billion f.o.b (2005 est.)
Export goods
clothing and footwear, machinery, chemicals, cork and paper products, hides
Main export partners
Spain 29%, Germany 13.4%, France 8.5%, Italy 5.2%, Netherlands 4.3%, UK 4.2% (2005)
Imports$60.35 billion f.o.b. (2005 est.)
Import goods
machinery and transport equipment, chemicals, petroleum, textiles, agricultural products
Main import partners
UK 36.8%, United States 13.8%, Germany 9.1%, Netherlands 4.5% (2005)
Public finances
Revenues$78.84 billion (2005)
Expenses$90.27 billion (2005)
Economic aiddonor: ODA, $271 million (1995)
All values, unless otherwise stated, are in US dollars.

The Economy of Portugal is a high income mixed economy. Although being very high by world's average standards, Portugal remains the country with the lowest per capita GDP in Western Europe and is among the least wealthy in the European Union.[1] The Global Competitiveness Report 2008-2009 edition placed Portugal in the 43rd position out of 134 countries and territories.[2]

Research about quality of life by the Economist Intelligence Unit's quality of life survey placed Portugal as the country with the 19th-best quality of life in the world for the year 2005, ahead of other economically and technologically advanced countries like France, Germany, the United Kingdom and South Korea, but 9 places behind its only neighbour, Spain.[3]

In the 2000s, the Czech Republic, Greece, Malta, Slovakia and Slovenia have all overtaken Portugal in terms of GDP per head. Portuguese GDP per head has fallen from just over 80% of the EU 25 average in 1999 to just over 70% in 2007. This poor performance of the Portuguese economy was explored in April 2007 by The Economist which described Portugal as "a new sick man of Europe".[4] From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).[5]

Corruption has become an issue of major political and economic significance for the country. Some cases are well known and were widely reported in the media, such as the affairs in several municipalities involving local town hall officials and businesspersons, as well as a number of politicians with wider responsibilities and power.[6][7]

History

Main article: Economic history of Portugal

Portuguese economic growth in the period 1950-1973 created an opportunity for real integration with the developed economies of Western Europe. Through emigration, trade, tourism and foreign investment, individuals and firms changed their patterns of production and consumption, bringing about a structural transformation. Simultaneously, the increasing complexity of a growing economy raised new technical and organizational challenges, stimulating the formation of modern professional and management teams.[8][9]

Portugal changed its political regime in 1974 due to the Carnation Revolution, culminating with the end of one of its most notable periods of economic growth, which had started in the 1960s.[9] In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained just during the worst revolutionary period.[10]

Subsequent poor performance of the Portuguese economy was explored in April 2007 by The Economist which described Portugal as "a new sick man of Europe".[4] From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007).[5]

Portuguese subsidiaries of large multinational companies, such as Microsoft Portugal,[11] are still ranked among its most productive in the world for its continued high productivity records. A Siemens executive, Carlos de Melo Ribeiro, pointed to labor costs and productivity as major reasons why shipping semiconductors to Portugal for final production is more advantageous than retaining the work in Germany or Britain.[12][verification needed][13][unreliable source?]

Sectors

Business services have overtaken more traditional industries such as textiles, clothing, footwear, cork (of which Portugal is the world's leading producer).[14] and wood products and beverages.[15] At present, Portugal is exporting more technology than it imports.[15]

Portugal has a strong tradition in the fisheries sector and is one of the countries with the highest fish consumption per capita.[16]

Travel and tourism will continue to be extremely important for Portugal, with visitor numbers forecast to increase significantly over the next five years. However, there is increasing competition from Eastern European destinations such as Croatia who offer similar attractions to Portugal, and are often cheaper. Portugal must keep its focus on its niche attractions such as health, nature and rural tourism to stay ahead of its competitors.[17]

Alverca, Covilhã,[18] Évora,[19] and Ponte de Sor are the main centres of the Portuguese aerospace industry.

The insurance sector has performed well, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting risks, both the life and non-life sectors, overall, are estimated to be able to withstand a number of severe shocks, even though the impact on individual insurers varies widely.[20]

Energy

Main article: Renewable energy in Portugal
File:Alqueva dam portugal.jpg
Alqueva Dam, Alentejo. A hydroelectric power generation facility which created the largest artificial lake in Western Europe.

In 2006 the world's largest solar power plant began operating in the nation's sunny south while the world's first commercial wave power farm opened in October 2006 in the Norte region. As of 2006, 66% of electricity production was from coal and fuel power plants. A total of 29% was produced by hydroelectrics and 6% by wind energy [21]. In 2008, up to 43% of the electricity consumed in the country had been produced through the renewable energies, even though the hydroelectric production had decreased due to the dryness that affected the country.[22]

Labour

Officially, in 2008 the unemployment decreased to 7.3% in the second quarter of 2008.[23] In 2008, about 8% of the people with a degree were unemployed, and a much larger proportion were underemployed.[24] Nearly 60,000 people with an academic degree are unemployed in Portugal.[24] According to Eurostat, Portugal was the 6th poorest country of the 27 member states of the European Union by purchasing power, for the period 2005-2007.[1] The last European survey of workers, published in 2007 and which formed the basis of this 2009 research study showed that Portugal is the 5th European country with lower quality of work.[25]

Competitiveness by city

A study concerning competitiveness of the 18 Portuguese district capitals, complying with World Economic Forum methodology, was made by Minho University economics researchers. It was published in Público newspaper on 30 September 2006. The best-ranked cities in the study were Évora, Lisbon and Coimbra.[26][27]

Ranking:

References

  1. ^ a b Template:Pt icon Portugueses perderam poder de compra entre 2005 e 2007 e estão na cauda da Zona Euro, Público (December 11, 2008)
  2. ^ "The Global Competitiveness Index rankings" (PDF). World Economic Forum. Retrieved 2009-03-20.
  3. ^ http://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf
  4. ^ a b "A new sick man of Europe", The Economist, 2007-04-14. http://www.economist.com/world/europe/displaystory.cfm?story_id=9009032
  5. ^ a b Luis Miguel Mota, População desempregada aumentou 65% em cinco anos, Destak.pt (6th June 2008)
  6. ^ Eurojust chief embroiled in Portuguese corruption scandal, euobserver.com (May 13, 2009)
  7. ^ People & Power, Al Jazeera, Al Jazeera (March 2008)
  8. ^ [1], Joaquim da Costa Leite (Aveiro University) - Instituições, Gestão e Crescimento Económico: Portugal, 1950-1973
  9. ^ a b Template:Pt icon Fundação da SEDES - As primeiras motivações, "Nos anos 60 e até 1973 teve lugar, provavelmente, o mais rápido período de crescimento económico da nossa História, traduzido na industrialização, na expansão do turismo, no comércio com a EFTA, no desenvolvimento dos sectores financeiros, investimento estrangeiro e grandes projectos de infra-estruturas. Em consequência, os indicadores de rendimentos e consumo acompanham essa evolução, reforçados ainda pelas remessas de emigrantes.", SEDES
  10. ^ Economic Growth and Change, U.S. Library of Congress, countrystudies.us
  11. ^ Microsoft Portugal novamente eleita melhor Subsidiária mundial da Microsoft International em 2008
  12. ^ Siemens Builds on Long History in Portugal, to the Benefit of Both, By Karen E. Thuermer, October, 1997, in Keller Publishing [2]
  13. ^ "The investment made in Portugal by the VW group has enabled “this plant to become one of the best in the VW Group and indeed in the whole automotive industry in terms of quality, productivity, absenteeism, safety, and many other decisive criteria”, Gerd Heuss upon the manufacturing of car nº 1 million in Palmela", June 2003., AICEP - Business Development Agency
  14. ^ Grande Enciclopédia Universal, p. 10543, "Portugal", para. 4
  15. ^ a b Investing in Portugal Report, Financial Times
  16. ^ Template:Pt icon PESSOA, M.F.; MENDES, B.; OLIVEIRA, J.S. CULTURAS MARINHAS EM PORTUGAL, "O consumo médio anual em produtos do mar pela população portuguesa, estima-se em cerca de 58,5 kg/ por habitante sendo, por isso, o maior consumidor em produtos marinhos da Europa e um dos quatro países a nível mundial com uma dieta à base de produtos do mar."
  17. ^ [3], Euromonitor International
  18. ^ Template:Pt icon Covilhã: Aleia vai montar avião até agora vendido em kit e jactos portugueses em 2011, 14th April 2008
  19. ^ Template:Pt icon Évora aprova isenções fiscais aos projectos da Embraer, Diário Digital (22nd August 2008)
  20. ^ Portugal: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Securities Regulation, and Insurance Regulation, IMF, (October 2006)
  21. ^ "IEA Energy Statistics: Portugal". International Energy Agency. 2006. Retrieved 2009-04-07.
  22. ^ Staff (2009-04-08). "Fontes renováveis originaram 43% da electricidade consumida". Diário Digital (in Portuguese). Retrieved 2009-04-17.
  23. ^ Template:Pt icon Taxa de desemprego desce para 7,3 por cento no segundo trimestre, Público (14th August 2008)
  24. ^ a b Template:Pt icon Licenciados desempregados mais do que duplicaram desde 2002, Diário Digital (19th February 2008)
  25. ^ Template:Pt icon Portugal é um dos países com pior qualidade de emprego, Destak.pt (May 28, 2009).
  26. ^ [4]
  27. ^ [5], [6]

Template:Life in Portugal

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