Economy of Portugal
Encyclopedia
The Economy of Portugal
is a high income
mixed
economy
. The Global Competitiveness Report
2008-2009 edition placed Portugal in the 43rd position out of 134 countries and territories.
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. The Portuguese currency is the euro
(€) and the country's economy is in the Eurozone
since its starting. Portugal's central bank
is the Banco de Portugal
, which is part of the European System of Central Banks
. The major stock exchange
is the Euronext Lisbon
which is part of the NYSE Euronext, the first global stock exchange.
Although its gradual modernization and relative expansion since the 1960s, the educational system
remained underdeveloped until the 2000s when it finally reached the World's best practices and trends. However, the country has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. These long-term problems have hindered much economic growth.
The Financial Crisis of 2008 is still affecting the Portuguese economy severely, causing a wide range of domestic problems specifically related to the levels of public deficit in the economy, as well as the excessive debt levels. Nonetheless, the government faces tough choices in its attempts to stimulate the economy, while attempting to maintain its public deficit around the EU average. In April 2011, Portugal confirmed it will have a financial bail-out from the European Union worth €80bn ($115bn, £70bn), following Greece and the Republic of Ireland. It has been predicted that the Portuguese economy will not significantly recover until 2012.
The country is home to a number of noted leading companies with world reputation, like Grupo Portucel Soporcel, a major world player in the international paper market, Sonae Indústria
, the largest producer of wood-based panels in the world, Corticeira Amorim
, the world leader in cork production, and Conservas Ramirez, the oldest canned fish producer in continuous operation.
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 colonial
possessions, mainly in Asia
(spice
s, silk
, dye
s, porcelain
and gems), 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 Angola and Mozambique, territories that would experience reasonable rates of economic growth until the departure of the Portuguese in 1975.
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.
The economy of Portugal and its overseas territories on the eve of the Carnation Revolution
(a military coup on April 25, 1974) was growing well above the European average. Average family purchasing power was rising together with new consumption patterns and trends and this was promoting both investment in new capital equipment and consumption expenditure for durable and nondurable consumer goods. The Estado Novo regime economic policy encouraged and created conditions for the formation of large business conglomerates. The regime maintained a policy of corporatism
that resulted in the placement of a big part of the Portuguese economy in the hands of a number of strong conglomerate
s, including those founded by the families of António Champalimaud (Banco Totta & Açores, Banco Pinto & Sotto Mayor, Secil, Cimpor
), José Manuel de Mello
(CUF – Companhia União Fabril
), Américo Amorim
(Corticeira Amorim
) and the dos Santos family (Jerónimo Martins
). Those Portuguese conglomerates had a business model with similarities to South Korea
n chaebol
s and Japan
ese keiretsu
s and zaibatsu
s. The Companhia União Fabril (CUF) was one of the largest and most diversified Portuguese conglomerates with its core business
es (cement
, chemicals, petrochemicals, agrochemicals, textiles, beer
, beverages, metallurgy
, naval engineering, electrical engineering
, insurance
, banking, paper
, tourism
, mining
, etc.) and corporate headquarters located in mainland Portugal, but also with branches, plants and several developing business projects all around the Portuguese Empire
, especially in the Portuguese territores of Angola
and Mozambique. Other medium sized family companies specialized in textiles (for instance those located in the city of Covilhã
and the northwest), ceramics, porcelain, glass and crystal (like those of Alcobaça
, Caldas da Raínha
and Marinha Grande), engineered wood (like SONAE
near Porto
), canned fish (like those of Algarve and the northwest), fishing, food and beverage producing, tourism (well established in Estoril
/Cascais
/Sintra
and growing as an international attraction in the Algarve since the 1960s) and in agriculture (like the ones scattered around the Alentejo – known as the breadbasket
of Portugal) completed the panorama of the national economy by the early 1970s. In addition, rural areas' populations were committed to agrarianism
that was of great importance for a majority of the total population, with many families living exclusively from agriculture or complementing their salaries with farming, husbandry and forestry yields.
Besides that, the overseas territories were also displaying impressive economic growth and development rates from the 1920s onwards. Even during the Portuguese Colonial War
(1961-1974), a counterinsurgency war against independentist guerrilla and terrorism
, the overseas territories of Angola
and Mozambique (Portuguese Overseas Provinces at the time) had countinuous economic growth rates and several sectors of its local economies were booming. They were internationally notable centres of production of oil, coffee, cotton, cashew, coconut, timber, minerals (like diamonds), metals (like iron and aluminium), banana, citrus, tea, sisal, beer, cement, fish and other sea products, beef and textiles.
Labour unions were not allowed and a minimum wage
policy was not enforced. However, in a context of an expanding economy, bringing better living conditions for the Portuguese population in the 1960s, the outbreak of the colonial wars in Africa set off significant social changes, among them the rapid incorporation of more and more women into the labour market. Marcelo Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security. The objectives of Caetano's pension reform were threefold: enhancing equity, reducing fiscal and actuarial imbalance, and achieving more efficiency for the economy as a whole, for example, by establishing contributions less distortive to labour markets or by allowing the savings generated by pension funds to increase the investments in the economy.
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.
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).
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.
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.
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.
Membership in the European Communities
, achieved in 1986, contributed to stable economic growth
and development
, largely through increased trade
ties and an inflow of funds
allocated by the European Union
(and before that the European Communities) 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.
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.
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.
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.
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 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
". From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007). In December 2009, ratings agency Standard and Poor's lowered its long-term credit assessment of Portugal to "negative" from "stable," voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt.
However, the Portuguese subsidiaries of large multinational companies, such as Siemens Portugal
, Volkswagen Autoeuropa
, Qimonda Portugal
(before the parent company has filed for bankruptcy), IKEA
, Nestlé Portugal
, Microsoft Portugal
, Unilever
/Jerónimo Martins
and Danone Portugal, are still ranked among its most productive in the world for its continued high productivity records. 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
, Sumol + Compal
, Delta Cafés
, Derovo
, Critical Software
, Galp Energia
, EDP
, Grupo José de Mello
, Sovena Group, Valouro
, Renova
, Teixeira Duarte
, Soares da Costa
, Portucel Soporcel
, Simoldes
, Iberomoldes
and Logoplaste
.
Some senior German policy makers went as far as to say that emergency bailouts to Greece and future EU aid recipients should bring with it harsh penalties.
In 2010, acronyms were widely used by international bond analysts, academics, and by the international economic press when referring to the underperforming economies of Portugal, Italy, Ireland, Greece, and Spain.
A report published in January 2011 by the Diário de Notícias
, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution
in 1974 and 2010, the democratic Portuguese Republic government
s have encouraged over expenditure and investment bubbles through unclear public-private partnerships. This has funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state-managed public works
, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that has boosted the number of redundant public servants. The economy has also been damaged by risky credit
, public debt creation and mismanaged European structural and cohesion funds for almost four decades. Apparently, the Prime Minister Sócrates
's cabinet was not able to forecast or prevent any of this when symptoms first appeared in 2005, and later was incapable of doing anything to ameliorate the situation when the country was on the verge of bankruptcy in 2011.
In April 2011, Portugal confirmed that it will have a financial bailout from the IMF and the European Union worth 80bn Euros ($115 £70bn), following Greece and the Republic of Ireland.
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 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. However, it immediately rose again to higher rates. By December 2009, unemployment had surpassed the 10% mark nationwide.
Although being both a developed country and a high income country, Portugal has the lowest GDP per capita in Western Europe
and its population has one of the lowest incomes per head among member states of the European Union
. According to the Eurostat
it had the 6th lowest purchasing power
among the 27 member states of the European Union for the period 2005-2007.
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.
, which is regulated by law, is €485 per month (although paid in 14 installments, which means that on average the minimum wage is €565).
, 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
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 100,000 (60,000 in 2008) people with an academic degree are unemployed in Portugal. This group includes a large proportion of young adults.
Fisheries
and 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.
(6800 km2), Holm Oak
(5,340 km2), and Eucalyptus
(2,430 km2). Cork
is a major production, Portugal produces half of the world's cork. Significant mining resources are lithium
, tungsten
, tin
, and uranium
.
s and the Douro Valley
in vineyard
s. Olive trees (4,000 km2; 1,545 sq mi), vineyards (3,750 km2; 1,450 sq mi), wheat
(3,000 km2; 1,160 sq mi) and maize
(2,680 km2; 1,035 sq 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 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
, 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 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.
The major industries include: oil refineries, petrochemistry
, cement
production, automotive and ship industries
, electrical and electronics
industries, machinery, pulp and paper industry
, injection moulding
, plastic products
, textile
, footwear
, leather
, furniture
, ceramic
s, beverages and food industry
and cork
(leader producer). Automotive and other mechanical industries are primarily located in and around Setúbal
, Porto
, Lisbon
, Aveiro, Braga
, and Santarém
. Coimbra
and Oeiras have growing technological-based industries, including pharmaceuticals and software. Sines
is a major petrochemical
centre. 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. Modern non-traditional technology-based industries like aerospace
, biotechnology
and information technology
, have been developed in several locations across the country. Alverca, Covilhã
, Évora
, and Ponte de Sor are the main centres of Portuguese aerospace industry, which is led by Brazil-based company Embraer and the Portuguese company OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon
, Porto, Braga, Coimbra and Aveiro.
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
has developed significantly and generates approximately 5% of the wealth produced in Portugal.
, 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 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.
for 2005, published by the World Economic Forum
, placed Portugal on the 22nd position, ahead of countries and territories like Spain
, 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. The Global Competitiveness Index 2007-2008 placed Portugal on the 40th position out of 131 countries and territories. and in the 2008-2009 edition, it went even further down as Portugal was placed as the 43rd out of 134 countries and territories.
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
. , ,
Ranking:
institutions awarding academic degrees in economics
and business management across the whole country. Almost every polytechnical institute
have programmes in management and administration. All state-run universities have programmes in economics. Among the largest and most reputed 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), ISCTE – Lisbon University Institute, 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 Nova School of Business and Economics – NOVASBE); 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.
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
is a high income
High income country
A high-income economy is defined by the World Bank as a country with a Gross National Income per capita of $12,196 USD or more in 2009. While the term "high income" is often used interchangeably with "First World" and "developed country", the technical definitions of these terms differ...
mixed
Mixed economy
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety...
economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
. The Global Competitiveness Report
Global Competitiveness Report
The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....
2008-2009 edition placed Portugal in the 43rd position out of 134 countries and territories.
Most imports come from the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
countries of Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. Most exports also go to other European Union member states. The Portuguese currency is the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
(€) and the country's economy is in the Eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
since its starting. Portugal's central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
is the Banco de Portugal
Banco de Portugal
The Banco de Portugal is the central bank of the Republic of Portugal. Established by a royal charter of 19 November 1846 to act as a commercial bank and issuing bank, it came about as the result of a merger of the Banco de Lisboa and the Companhia de Confiança Nacional, an investment company...
, which is part of the European System of Central Banks
European System of Central Banks
The European System of Central Banks is composed of the European Central Bank and the national central banks of all 27 European Union Member States.-Functions:...
. The major stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
is the Euronext Lisbon
Euronext Lisbon
Euronext Lisbon is a stock exchange in Lisbon, Portugal. It belongs to the NYSE Euronext group, the first global stock exchange.Euronext Lisbon trades equities, public and private bonds, participation bonds, warrants, corporate warrants, investment trust units, and exchange traded funds...
which is part of the NYSE Euronext, the first global stock exchange.
Although its gradual modernization and relative expansion since the 1960s, the educational system
Education in Portugal
Education in Portugal is regulated by the State through two ministries - the Ministry of Education, and the Ministry of Science, Technology and Higher Education. There are a system of public education and also many private schools at all levels of education...
remained underdeveloped until the 2000s when it finally reached the World's best practices and trends. However, the country has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. These long-term problems have hindered much economic growth.
The Financial Crisis of 2008 is still affecting the Portuguese economy severely, causing a wide range of domestic problems specifically related to the levels of public deficit in the economy, as well as the excessive debt levels. Nonetheless, the government faces tough choices in its attempts to stimulate the economy, while attempting to maintain its public deficit around the EU average. In April 2011, Portugal confirmed it will have a financial bail-out from the European Union worth €80bn ($115bn, £70bn), following Greece and the Republic of Ireland. It has been predicted that the Portuguese economy will not significantly recover until 2012.
The country is home to a number of noted leading companies with world reputation, like Grupo Portucel Soporcel, a major world player in the international paper market, Sonae Indústria
Sonae Indústria
Sonae Indústria is a manufacturer of engineered wood products, founded and headquartered in Maia, Portugal. Present in twelve countries within three continents, Sonae Indústria has a wide range of products, from simple board to complete construction systems, a large range of wood-based products...
, the largest producer of wood-based panels in the world, Corticeira Amorim
Corticeira Amorim
Corticeira Amorim S.G.P.S., S.A., is a Portuguese subholding company belonging to the Amorim Group and claims to be the world leader in the cork industry for over 130 years, with operations in hundreds of countries all over the world. Corticeira Amorim S.G.P.S., S.A...
, the world leader in cork production, and Conservas Ramirez, the oldest canned fish producer in continuous operation.
Portuguese Colonial Empire
During the Portuguese EmpirePortuguese Empire
The Portuguese Empire , also known as the Portuguese Overseas Empire or the Portuguese Colonial Empire , was the first global empire in history...
period, started in the 15th century, until the Carnation Revolution
Carnation Revolution
The Carnation Revolution , also referred to as the 25 de Abril , was a military coup started on 25 April 1974, in Lisbon, Portugal, coupled with an unanticipated and extensive campaign of civil resistance...
of 1974, the economy of Portugal was centered in trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
and raw material
Raw material
A raw material or feedstock is the basic material from which a product is manufactured or made, frequently used with an extended meaning. For example, the term is used to denote material that came from nature and is in an unprocessed or minimally processed state. Latex, iron ore, logs, and crude...
s related activities within its vast colonial
Colonialism
Colonialism is the establishment, maintenance, acquisition and expansion of colonies in one territory by people from another territory. It is a process whereby the metropole claims sovereignty over the colony and the social structure, government, and economics of the colony are changed by...
possessions, mainly in Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
(spice
Spice
A spice is a dried seed, fruit, root, bark, or vegetative substance used in nutritionally insignificant quantities as a food additive for flavor, color, or as a preservative that kills harmful bacteria or prevents their growth. It may be used to flavour a dish or to hide other flavours...
s, silk
Silk
Silk is a natural protein fiber, some forms of which can be woven into textiles. The best-known type of silk is obtained from the cocoons of the larvae of the mulberry silkworm Bombyx mori reared in captivity...
, dye
Dye
A dye is a colored substance that has an affinity to the substrate to which it is being applied. The dye is generally applied in an aqueous solution, and requires a mordant to improve the fastness of the dye on the fiber....
s, porcelain
Porcelain
Porcelain is a ceramic material made by heating raw materials, generally including clay in the form of kaolin, in a kiln to temperatures between and...
and gems), Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...
(ivory
Ivory
Ivory is a term for dentine, which constitutes the bulk of the teeth and tusks of animals, when used as a material for art or manufacturing. Ivory has been important since ancient times for making a range of items, from ivory carvings to false teeth, fans, dominoes, joint tubes, piano keys and...
, timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...
, oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and diamonds) and South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...
(sugar cane, dye
Dye
A dye is a colored substance that has an affinity to the substrate to which it is being applied. The dye is generally applied in an aqueous solution, and requires a mordant to improve the fastness of the dye on the fiber....
s, wood
Wood
Wood is a hard, fibrous tissue found in many trees. It has been used for hundreds of thousands of years for both fuel and as a construction material. It is an organic material, a natural composite of cellulose fibers embedded in a matrix of lignin which resists compression...
s and gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
). 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 Angola and Mozambique, territories that would experience reasonable rates of economic growth until the departure of the Portuguese in 1975.
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.
The economy of Portugal and its overseas territories on the eve of the Carnation Revolution
Carnation Revolution
The Carnation Revolution , also referred to as the 25 de Abril , was a military coup started on 25 April 1974, in Lisbon, Portugal, coupled with an unanticipated and extensive campaign of civil resistance...
(a military coup on April 25, 1974) was growing well above the European average. Average family purchasing power was rising together with new consumption patterns and trends and this was promoting both investment in new capital equipment and consumption expenditure for durable and nondurable consumer goods. The Estado Novo regime economic policy encouraged and created conditions for the formation of large business conglomerates. The regime maintained a policy of corporatism
Corporatism
Corporatism, also known as corporativism, is a system of economic, political, or social organization that involves association of the people of society into corporate groups, such as agricultural, business, ethnic, labor, military, patronage, or scientific affiliations, on the basis of common...
that resulted in the placement of a big part of the Portuguese economy in the hands of a number of strong conglomerate
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...
s, including those founded by the families of António Champalimaud (Banco Totta & Açores, Banco Pinto & Sotto Mayor, Secil, Cimpor
Cimpor
Cimpor - Cimentos de Portugal is the largest Portuguese cement group, operating in eleven countries - Portugal, Spain, Morocco, Brazil, Tunisia, Turkey, Cape Verde, Mozambique, China, Egypt and South Africa, involved in manufacturing and marketing cement, hydraulic lime, concrete and aggregates,...
), José Manuel de Mello
José Manuel de Mello
José Manuel de Mello , was a Portuguese businessman who founded the conglomerate Grupo José de Mello. He was the heir of an older industrial conglomerate, Companhia União Fabril , which had been founded by his grandfather Alfredo da Silva. José started to work for CUF until the Carnation Revolution...
(CUF – Companhia União Fabril
Companhia União Fabril
The Companhia União Fabril is a Portuguese chemical corporation and a part of Grupo José de Mello.-History:The company was founded by Alfredo da Silva in 1871 and managed by his descendents, including José Manuel de Mello as a family-run business conglomerate. CUF was one of the largest and most...
), Américo Amorim
Americo Amorim
Américo Ferreira Amorim is a Portuguese entrepreneur, the third of four sons of Américo Alves Amorim. He was ranked by Forbes as the 212th richest person in the world in 2010....
(Corticeira Amorim
Corticeira Amorim
Corticeira Amorim S.G.P.S., S.A., is a Portuguese subholding company belonging to the Amorim Group and claims to be the world leader in the cork industry for over 130 years, with operations in hundreds of countries all over the world. Corticeira Amorim S.G.P.S., S.A...
) and the dos Santos family (Jerónimo Martins
Jerónimo Martins
Jerónimo Martins SGPS, SA is a Portugal-based company that operates in food distribution and consumer products manufacturing. The firm is the majority owner of Jerónimo Martins Retail , which operates the Pingo Doce super- and hypermarket chains in Portugal...
). Those Portuguese conglomerates had a business model with similarities to South Korea
South Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
n chaebol
Chaebol
Chaebol refers to a South Korean form of business conglomerate. They are global multinationals owning numerous international enterprises. The term is often used in a context similar to that of the English word "conglomerate"...
s and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese keiretsu
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. It is a type of business group. The keiretsu has maintained dominance over the Japanese economy for the greater half of the twentieth century....
s and zaibatsu
Zaibatsu
is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...
s. The Companhia União Fabril (CUF) was one of the largest and most diversified Portuguese conglomerates with its core business
Core business
The core business of an organization is an idealized construct intended to express that organization's "main" or "essential" activity.The corporate trend in the mid-20th Century of acquiring new enterprises and forming conglomerates enabled corporations to reduce costs funds and similar investment...
es (cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
, chemicals, petrochemicals, agrochemicals, textiles, beer
Beer
Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...
, beverages, metallurgy
Metallurgy
Metallurgy is a domain of materials science that studies the physical and chemical behavior of metallic elements, their intermetallic compounds, and their mixtures, which are called alloys. It is also the technology of metals: the way in which science is applied to their practical use...
, naval engineering, electrical engineering
Electrical engineering
Electrical engineering is a field of engineering that generally deals with the study and application of electricity, electronics and electromagnetism. The field first became an identifiable occupation in the late nineteenth century after commercialization of the electric telegraph and electrical...
, insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
, banking, paper
Paper
Paper is a thin material mainly used for writing upon, printing upon, drawing or for packaging. It is produced by pressing together moist fibers, typically cellulose pulp derived from wood, rags or grasses, and drying them into flexible sheets....
, tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
, mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
, etc.) and corporate headquarters located in mainland Portugal, but also with branches, plants and several developing business projects all around the Portuguese Empire
Portuguese Empire
The Portuguese Empire , also known as the Portuguese Overseas Empire or the Portuguese Colonial Empire , was the first global empire in history...
, especially in the Portuguese territores of Angola
Angola (Portugal)
Angola is the common name by which the Portuguese colony in southwestern Africa was known across different periods of time...
and Mozambique. Other medium sized family companies specialized in textiles (for instance those located in the city of Covilhã
Covilhã
Covilhã is a city in Covilha Municipality in Centro region, Portugal. The city proper has 36,723 inhabitants, and the municipality has an area of 555.6 km² with a total population of 53,501, being composed of 31 parishes. It is located in the Cova da Beira subregion, in the district of...
and the northwest), ceramics, porcelain, glass and crystal (like those of Alcobaça
Alcobaça
Alcobaça is a city in Alcobaça Municipality in Leiria District and Oeste Subregion, in Portugal, formerly included in the Estremadura Province. The city grew along the valleys of the rivers Alcoa and Baça, from which it derives its name. The municipality has a total population of 55,269...
, Caldas da Raínha
Caldas da Rainha
Caldas da Rainha is a city in western central Portugal. The city serves as the seat of the larger municipality of the same name and is the seat of the Comunidade Intermunicipal do Oeste...
and Marinha Grande), engineered wood (like SONAE
Sonae
Sonae is a conglomerate, and is the largest private employer in Portugal. The company is primarily engaged in the operation of retail stores through its subsidiary Modelo Continente....
near Porto
Porto
Porto , also known as Oporto in English, is the second largest city in Portugal and one of the major urban areas in the Iberian Peninsula. Its administrative limits include a population of 237,559 inhabitants distributed within 15 civil parishes...
), canned fish (like those of Algarve and the northwest), fishing, food and beverage producing, tourism (well established in Estoril
Estoril
Estoril is a seaside resort and civil parish of the Portuguese municipality of Cascais, Lisboa District. The Estoril coast is close to Lisbon, the capital of Portugal. It starts in Carcavelos, 15 kilometres from Lisbon, and stretches as far as Guincho, often known as Costa de Estoril-Sintra or...
/Cascais
Cascais
Cascais is a coastal town in Cascais Municipality in Portugal, 30 kilometres west of Lisbon, with about 35,000 residents. It is a cosmopolitan suburb of the Portuguese capital and one of the richest municipalities in Portugal. The former fishing village gained fame as a resort for Portugal's royal...
/Sintra
Sintra
Sintra is a town within the municipality of Sintra in the Grande Lisboa subregion of Portugal. Owing to its 19th century Romantic architecture and landscapes, becoming a major tourist centre, visited by many day-trippers who travel from the urbanized suburbs and capital of Lisbon.In addition to...
and growing as an international attraction in the Algarve since the 1960s) and in agriculture (like the ones scattered around the Alentejo – known as the breadbasket
Breadbasket
The breadbasket or the granary of a country is a region which, because of richness of soil and/or advantageous climate, produces an agricultural surplus which is often considered vital for the country as a whole. Rice bowl is a similar term used in Southeast Asia...
of Portugal) completed the panorama of the national economy by the early 1970s. In addition, rural areas' populations were committed to agrarianism
Agrarianism
Agrarianism has two common meanings. The first meaning refers to a social philosophy or political philosophy which values rural society as superior to urban society, the independent farmer as superior to the paid worker, and sees farming as a way of life that can shape the ideal social values...
that was of great importance for a majority of the total population, with many families living exclusively from agriculture or complementing their salaries with farming, husbandry and forestry yields.
Portuguese Colonial War
The Portuguese Colonial War , also known in Portugal as the Overseas War or in the former colonies as the War of liberation , was fought between Portugal's military and the emerging nationalist movements in Portugal's African colonies between 1961 and 1974, when the Portuguese regime was...
(1961-1974), a counterinsurgency war against independentist guerrilla and terrorism
Terrorism
Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
, the overseas territories of Angola
Angola (Portugal)
Angola is the common name by which the Portuguese colony in southwestern Africa was known across different periods of time...
and Mozambique (Portuguese Overseas Provinces at the time) had countinuous economic growth rates and several sectors of its local economies were booming. They were internationally notable centres of production of oil, coffee, cotton, cashew, coconut, timber, minerals (like diamonds), metals (like iron and aluminium), banana, citrus, tea, sisal, beer, cement, fish and other sea products, beef and textiles.
Labour unions were not allowed and a minimum wage
Minimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
policy was not enforced. However, in a context of an expanding economy, bringing better living conditions for the Portuguese population in the 1960s, the outbreak of the colonial wars in Africa set off significant social changes, among them the rapid incorporation of more and more women into the labour market. Marcelo Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security. The objectives of Caetano's pension reform were threefold: enhancing equity, reducing fiscal and actuarial imbalance, and achieving more efficiency for the economy as a whole, for example, by establishing contributions less distortive to labour markets or by allowing the savings generated by pension funds to increase the investments in the economy.
The military coup of 1974
The post Carnation RevolutionCarnation Revolution
The Carnation Revolution , also referred to as the 25 de Abril , was a military coup started on 25 April 1974, in Lisbon, Portugal, coupled with an unanticipated and extensive campaign of civil resistance...
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
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
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.
After the Carnation Revolution
Carnation Revolution
The Carnation Revolution , also referred to as the 25 de Abril , was a military coup started on 25 April 1974, in Lisbon, Portugal, coupled with an unanticipated and extensive campaign of civil resistance...
'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
Gross fixed capital formation
Gross fixed capital formation is a macroeconomic concept used in official national accounts such as the UNSNA, NIPAs and the European System of Accounts . The concept dates back to the NBER studies of Simon Kuznets of capital formation in the 1930s, and standard measures for it were adopted in the...
(7.8 percent).
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.
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.
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
Civil service
The term civil service has two distinct meanings:* A branch of governmental service in which individuals are employed on the basis of professional merit as proven by competitive examinations....
employment and the associated cost of public administration
Public administration
Public Administration houses the implementation of government policy and an academic discipline that studies this implementation and that prepares civil servants for this work. As a "field of inquiry with a diverse scope" its "fundamental goal.....
, together with the contribution of tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
services during the 1980s to the detriment of more sustainable and reproductive activities like manufacturing, exporting and technology/capital-intensive industries.
EU membership
European Communities
The European Communities were three international organisations that were governed by the same set of institutions...
, achieved in 1986, contributed to stable economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
and development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
, largely through increased trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
ties and an inflow of funds
Structural Funds and Cohesion Funds
The Structural Funds and the Cohesion Fund are financial tools set up to implement the Cohesion policy also referred to as the Regional policy of the European Union. They aim to reduce regional disparities in terms of income, wealth and opportunities...
allocated by the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(and before that the European Communities) to improve the country's infrastructure. After a recession
Recession
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. During recessions, many macroeconomic indicators vary in a similar way...
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.
In 1999, it continued to enjoy sturdy economic growth, falling interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
rates, and low unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
. The country qualified for the Economic and Monetary Union of the European Union
Economic and Monetary Union of the European Union
The Economic and Monetary Union is an umbrella term for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. As such, it is largely synonymous with the eurozone.All member states of the...
(EMU) in 1998 and joined with 10 other European countries in launching the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
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.
Household debt has expanded rapidly. The European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
, 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.
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
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
stood at 4.1% at the end of 2001, which was low compared to the EU average.
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 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
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
which described Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
as "a new sick man of Europe
Sick man of Europe
"Sick man of Europe" is a nickname that has been used to describe a European country experiencing a time of economic difficulty and/or impoverishment...
". From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007). In December 2009, ratings agency Standard and Poor's lowered its long-term credit assessment of Portugal to "negative" from "stable," voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt.
However, the Portuguese subsidiaries of large multinational companies, such as Siemens Portugal
Siemens AG
Siemens AG is a German multinational conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company....
, Volkswagen Autoeuropa
Volkswagen
Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...
, Qimonda Portugal
Qimonda
Qimonda AG, was a memory company split out of Infineon Technologies on 1 May 2006, to form at the time the second largest DRAM company worldwide, according to the industry research firm Gartner Dataquest...
(before the parent company has filed for bankruptcy), IKEA
IKEA
IKEA is a privately held, international home products company that designs and sells ready-to-assemble furniture such as beds and desks, appliances and home accessories. The company is the world's largest furniture retailer...
, Nestlé Portugal
Nestlé
Nestlé S.A. is the world's largest food and nutrition company. Founded and headquartered in Vevey, Switzerland, Nestlé originated in a 1905 merger of the Anglo-Swiss Milk Company, established in 1867 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri...
, Microsoft Portugal
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Unilever
Unilever
Unilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products....
/Jerónimo Martins
Jerónimo Martins
Jerónimo Martins SGPS, SA is a Portugal-based company that operates in food distribution and consumer products manufacturing. The firm is the majority owner of Jerónimo Martins Retail , which operates the Pingo Doce super- and hypermarket chains in Portugal...
and Danone Portugal, are still ranked among its most productive in the world for its continued high productivity records. Many Portuguese companies have grown and expanded internationally since after 1986. Among the most notable Portugal-based global companies are SONAE
Sonae
Sonae is a conglomerate, and is the largest private employer in Portugal. The company is primarily engaged in the operation of retail stores through its subsidiary Modelo Continente....
, Amorim
Corticeira Amorim
Corticeira Amorim S.G.P.S., S.A., is a Portuguese subholding company belonging to the Amorim Group and claims to be the world leader in the cork industry for over 130 years, with operations in hundreds of countries all over the world. Corticeira Amorim S.G.P.S., S.A...
, Sogrape
Sogrape
The Sogrape Vinhos S.A. is a Portuguese winery founded in 1942 by Fernando van Zeller Guedes as “Sociedade Comercial dos Grandes Vinhos de Mesa de Portugal”.Its first product was the rosé wine Mateus...
, EFACEC
EFACEC
The EFACEC Group is the largest Portuguese corporation in the field of electromechanics and electronics, with a strong presence in different international markets. It is headquartered in Matosinhos, Greater Porto area, Portugal. The José de Mello corporation owns about 50% of EFACEC's capital....
, Portugal Telecom
Portugal Telecom
Portugal Telecom is the largest telecommunications service provider in Portugal. Although it operates mainly in Portugal and Brazil, it has also a significant presence in Guinea-Bissau, Cape Verde, Mozambique, Timor-Leste, Angola, Kenya, the People's Republic of China, and São Tomé and...
, Jerónimo Martins
Jerónimo Martins
Jerónimo Martins SGPS, SA is a Portugal-based company that operates in food distribution and consumer products manufacturing. The firm is the majority owner of Jerónimo Martins Retail , which operates the Pingo Doce super- and hypermarket chains in Portugal...
, Cimpor
Cimpor
Cimpor - Cimentos de Portugal is the largest Portuguese cement group, operating in eleven countries - Portugal, Spain, Morocco, Brazil, Tunisia, Turkey, Cape Verde, Mozambique, China, Egypt and South Africa, involved in manufacturing and marketing cement, hydraulic lime, concrete and aggregates,...
, Unicer
Unicer
União Cervejeira SA , is a Portuguese beer producer, owner of several beer brands, including Super Bock, Cristal, Cheers, Cool Beer, Clok, and is the Portuguese distributor for Carlsberg, Tuborg, Guinness, Tetley's, and Kilkenny. One of the most famous is Super Bock, the market leader in the country...
, Millennium bcp, Lactogal
Lactogal
Lactogal is a Portuguese food products company focused on dairy products, milk, fruit juice and mineral water. It is headquartered in Porto and is placed among the twenty largest agro-food European companies...
, Sumol + Compal
Sumol + Compal
Sumol + Compal is a Portuguese food and beverages company specializing in soft drink production and bottling. The company's principal activities are the manufacturing, marketing, bottling, selling, exporting, and distribution of various types of beverages, such as soft drinks, juices, nectars,...
, Delta Cafés
Delta Cafés
Delta Cafés , officially named Novadelta - Comércio e Indústria de Cafes, S.A., is a Portuguese coffee roasting and coffee packaging company headquartered in Campo Maior, Alentejo. The company was founded in 1961 and is among the top market leaders in the Iberian Peninsula...
, Derovo
Derovo
Derovo - Derivados de ovos, S.A. is a Portugal-based company headquartered in Pombal and founded in 1994, specialized in the production of pasteurized egg products, in the production of boiled eggs, in the production of Fullprotein , and develops egg-based products to the needs of its customers,...
, Critical Software
Critical Software
Critical Software is a Portuguese information systems and software company, headquartered in Coimbra. Critical Software specialises in the development and deployment of software solutions or COTS based systems...
, Galp Energia
Galp Energia
The Galp Energia Group is a Portuguese corporation which consists of more than 100 companies engaged in activities such as natural gas supply, regasification, transport, storage, and distribution; petroleum products exploration, production, refining, trading, logistics and retailing; co-generation...
, EDP
Energias de Portugal
EDP - Energias de Portugal ranks among Europe's major electricity operators, as well as being one of Portugal's largest business groups....
, Grupo José de Mello
Grupo José de Mello
The José de Mello Group is an economic group that has a stable Portuguese shareholder base. It is one of Portugal's biggest corporate groups...
, Sovena Group, Valouro
Valouro
Grupo Valouro or simply Valouro, is one of the largest economic groups in Portuguese agrobusiness industry and the biggest in the poultry sector...
, Renova
Renova (brand)
Renova is a Portuguese company that produces paper consumption goods . It is based in the city of Torres Novas, located in Médio Tejo, a NUTS3 subregion belonging to Centro region.It is one of the most well-known industry brands inside and outside of the country...
, Teixeira Duarte
Teixeira Duarte
Teixeira Duarte is one of the largest construction companies in Portugal, headquartered in Oeiras. The company was founded in 1921 by Ricardo Esquível Teixeira Duarte, an engineer. It is a major stakeholder in Cimpor and Banco Comercial Português. Today operates in countries and regions like...
, Soares da Costa
Soares da Costa
Soares da Costa SGPS, S.A. is a Portuguese company. Its main activities are civil engineering and construction, public works, real estate, housing construction, production of construction materials and other related activities. It also has interests in rendering financial services. The group...
, Portucel Soporcel
Portucel Soporcel
The Portucel Soporcel Group is a Portuguese pulp and paper company, which resulted from the 2001 merger of the firms Portucel and Soporcel....
, Simoldes
Simoldes
Simoldes is a Portuguese mould maker company headquartered in Oliveira de Azeméis.Claimed to be Europe's largest mould maker, Simoldes Group Mould Division supplies plastic injection moulds for the automotive industry....
, Iberomoldes
Iberomoldes
Iberomoldes is one of the largest mould engineering and product development groups in the world, with about 800 employees. The company's headquarters are in Marinha Grande, Portugal, it has engineering offices in the UK and Sweden...
and Logoplaste
Logoplaste
Logoplaste is a Portuguese company, producing rigid plastic containers.Logoplaste was incorporated in 1976, pioneering in-house manufacturing in Europe, with the “Hole in the Wall” concept...
.
Portuguese Financial Crisis (2010-Present)
The Portuguese Financial crisis is a major political crisis and economic crisis currently taking place in Portugal, which started during the first weeks of 2010. There was renewed anxiety about the excessive levels of debt in some EU countries and, more generally, about the health of the euro has spread from Ireland and Greece to Portugal, Spain and Italy.Some senior German policy makers went as far as to say that emergency bailouts to Greece and future EU aid recipients should bring with it harsh penalties.
In 2010, acronyms were widely used by international bond analysts, academics, and by the international economic press when referring to the underperforming economies of Portugal, Italy, Ireland, Greece, and Spain.
A report published in January 2011 by the Diário de Notícias
Diário de Notícias
Diário de Notícias is a Portuguese daily newspaper, founded in Lisbon, on December 29, 1864 by Tomás Quintino Antunes and Eduardo Coelho. It gradually became one of the best known Portuguese newspapers...
, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution
Carnation Revolution
The Carnation Revolution , also referred to as the 25 de Abril , was a military coup started on 25 April 1974, in Lisbon, Portugal, coupled with an unanticipated and extensive campaign of civil resistance...
in 1974 and 2010, the democratic Portuguese Republic government
Government of Portugal
The Government is one of the four sovereignty organs of the Portuguese Republic. It is also the organ that conducts politics in general in the country and is also the superior body in public administration...
s have encouraged over expenditure and investment bubbles through unclear public-private partnerships. This has funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state-managed public works
Public works
Public works are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community...
, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that has boosted the number of redundant public servants. The economy has also been damaged by risky credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
, public debt creation and mismanaged European structural and cohesion funds for almost four decades. Apparently, the Prime Minister Sócrates
José Sócrates
José Sócrates Carvalho Pinto de Sousa, GCIH , commonly known by José Sócrates , is a Portuguese politician who was the Prime Minister of Portugal from 12 March 2005 to 21 June 2011....
's cabinet was not able to forecast or prevent any of this when symptoms first appeared in 2005, and later was incapable of doing anything to ameliorate the situation when the country was on the verge of bankruptcy in 2011.
In April 2011, Portugal confirmed that it will have a financial bailout from the IMF and the European Union worth 80bn Euros ($115 £70bn), following Greece and the Republic of Ireland.
Employment and wages
The unemployment is over 10% today. The number of unemployed people has increased since 2000.As of May 2006, over 420,000 people were unemployed in Portugal. The unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
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 Vale do Ave
Ave, Subregion
Ave is a subregion integrated in the larger Norte Region, Portugal. Is bordered to the north by Cávado Subregion, to the east and south by Tâmega Subregion and to the west by Grande Porto Subregion. It is a densely populated subregion and one of the more industrialized in the country...
, the unemployment rate has reached 15%, and in the Península de Setúbal
Península de Setúbal
The Península de Setúbal is a NUTS III subdivision of Lisbon Region , in Portugal. The subregion's administrative center is Setúbal, and the largest cities are Almada and Setúbal.It takes its name from the Setúbal Peninsula.Area: 1,729 km²...
sub-region 12.5%.
Officially, in 2008 the unemployment decreased to 7.3% in the second quarter of 2008. However, it immediately rose again to higher rates. By December 2009, unemployment had surpassed the 10% mark nationwide.
Although being both a developed country and a high income country, Portugal has the lowest GDP per capita in Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
and its population has one of the lowest incomes per head among member states of the European Union
Economy of the European Union
The economy of the European Union generates a GDP of over €12,279.033 billion according to the International Monetary Fund , making it the largest economy in the world...
. According to the Eurostat
Eurostat
Eurostat is a Directorate-General of the European Commission located in Luxembourg. Its main responsibilities are to provide the European Union with statistical information at European level and to promote the integration of statistical methods across the Member States of the European Union,...
it had the 6th lowest purchasing power
Purchasing power
Purchasing power is the number of goods/services that can be purchased with a unit of currency. For example, if you had taken one dollar to a store in the 1950s, you would have been able to buy a greater number of items than you would today, indicating that you would have had a greater purchasing...
among the 27 member states of the European Union for the period 2005-2007.
Maria da Conceição Cerdeira, one of the authors of a published research study made by the Technical University of Lisbon
Technical University of Lisbon
The Technical University of Lisbon is a Portuguese public university. It was created in 1930 in Lisbon, as a confederation of older schools, and comprises, nowadays, the faculties and institutes of veterinary medicine; agricultural sciences; economics and business administration; engineering,...
'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
Northern Europe
Northern Europe is the northern part or region of Europe. Northern Europe typically refers to the seven countries in the northern part of the European subcontinent which includes Denmark, Estonia, Latvia, Lithuania, Norway, Finland and Sweden...
or North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. 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.
Wages
The average wage in Portugal is €1,039 per month (net), and the minimum wageMinimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
, which is regulated by law, is €485 per month (although paid in 14 installments, which means that on average the minimum wage is €565).
Graduate unemployment
In 2008, about 8% of the people with a degree were unemployedGraduate unemployment
Graduate unemployment is unemployment among people with an academic degree. Research undertaken proved that the unemployment, and much more so, the underemployment...
, and a much larger proportion were underemployed. This directly was correlated with a general lack of employability
Employability
Employability refers to a person's capability of gaining initial employment, maintaining employment, and obtaining new employment if required . In simple terms, employability is about being capable of getting and keeping fulfilling work...
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
Bologna process
The purpose of the Bologna Process is the creation of the European Higher Education Area by making academic degree standards and quality assurance standards more comparable and compatible throughout Europe, in particular under the Lisbon Recognition Convention...
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
Secondary education
Secondary education is the stage of education following primary education. Secondary education includes the final stage of compulsory education and in many countries it is entirely compulsory. The next stage of education is usually college or university...
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
José Sócrates
José Sócrates Carvalho Pinto de Sousa, GCIH , commonly known by José Sócrates , is a Portuguese politician who was the Prime Minister of Portugal from 12 March 2005 to 21 June 2011....
).
Nearly 100,000 (60,000 in 2008) people with an academic degree are unemployed in Portugal. This group includes a large proportion of young adults.
Economy by sector
Fishing in Portugal
Fishing is a major economic activity in Portugal. The country has a long tradition in the sector, and is among the countries in the world with the highest fish consumption per capita. Roman ruins of fish processing facilities were found across the Portuguese coast. Fish has been an important staple...
and agriculture
Agriculture in Portugal
Agriculture in Portugal is based on small to medium-sized family-owned dispersed units, however, the sector also includes larger scale intensive farming export-oriented agrobusinesses backed by companies...
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 pine trees (13,500 km2), Cork OakCork Oak
Quercus suber, commonly called the Cork Oak, is a medium-sized, evergreen oak tree in the section Quercus sect. Cerris. It is the primary source of cork for wine bottle stoppers and other uses, such as cork flooring. It is native to southwest Europe and northwest Africa.It grows to up to 20 m,...
(6800 km2), Holm Oak
Holm Oak
Quercus ilex, the Holm Oak or Holly Oak is a large evergreen oak native to the Mediterranean region. It takes its name from holm, an ancient name for holly...
(5,340 km2), and Eucalyptus
Eucalyptus
Eucalyptus is a diverse genus of flowering trees in the myrtle family, Myrtaceae. Members of the genus dominate the tree flora of Australia...
(2,430 km2). Cork
Cork (material)
Cork is an impermeable, buoyant material, a prime-subset of bark tissue that is harvested for commercial use primarily from Quercus suber , which is endemic to southwest Europe and northwest Africa...
is a major production, Portugal produces half of the world's cork. Significant mining resources are lithium
Lithium
Lithium is a soft, silver-white metal that belongs to the alkali metal group of chemical elements. It is represented by the symbol Li, and it has the atomic number 3. Under standard conditions it is the lightest metal and the least dense solid element. Like all alkali metals, lithium is highly...
, tungsten
Tungsten
Tungsten , also known as wolfram , is a chemical element with the chemical symbol W and atomic number 74.A hard, rare metal under standard conditions when uncombined, tungsten is found naturally on Earth only in chemical compounds. It was identified as a new element in 1781, and first isolated as...
, tin
Tin
Tin is a chemical element with the symbol Sn and atomic number 50. It is a main group metal in group 14 of the periodic table. Tin shows chemical similarity to both neighboring group 14 elements, germanium and lead and has two possible oxidation states, +2 and the slightly more stable +4...
, and uranium
Uranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...
.
Agriculture and fisheries
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 treeOlive Tree
The Olive Tree was a denomination used for several successive centre-left Italian political coalitions from 1995 to 2007.The historical leader and ideologue of these coalitions was Romano Prodi, Professor of Economics and former leftist Christian Democrat, who invented the name and the symbol of...
s and the Douro Valley
Douro
The Douro or Duero is one of the major rivers of the Iberian Peninsula, flowing from its source near Duruelo de la Sierra in Soria Province across northern-central Spain and Portugal to its outlet at Porto...
in vineyard
Vineyard
A vineyard is a plantation of grape-bearing vines, grown mainly for winemaking, but also raisins, table grapes and non-alcoholic grape juice...
s. Olive trees (4,000 km2; 1,545 sq mi), vineyards (3,750 km2; 1,450 sq mi), wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
(3,000 km2; 1,160 sq mi) and maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
(2,680 km2; 1,035 sq mi) are produced in vast areas. Portuguese wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
and olive oil
Olive oil
Olive oil is an oil obtained from the olive , a traditional tree crop of the Mediterranean Basin. It is commonly used in cooking, cosmetics, pharmaceuticals, and soaps and as a fuel for traditional oil lamps...
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
Port wine
Port wine is a Portuguese fortified wine produced exclusively in the Douro Valley in the northern provinces of Portugal. It is typically a sweet, red wine, often served as a dessert wine, and comes in dry, semi-dry, and white varieties...
, Vinho Verde
Vinho Verde
Vinho Verde is a Portuguese wine from the Minho region in the far north of the country. The name literally means "Green Wine" , referring to its youthful freshness that leads to a very slight green color on the edges of the wine. The region is characterized by its many small growers, which...
and Madeira Wine
Madeira wine
Madeira is a fortified Portuguese wine made in the Madeira Islands. Some wines produced in small quantities in California and Texas are also referred to as "Madeira", or "Madera", although those wines do not conform to the EU PDO regulations...
are the leading wine exporters. Portugal is also a quality producer of fruits, namely the Algarve oranges
Orange (fruit)
An orange—specifically, the sweet orange—is the citrus Citrus × sinensis and its fruit. It is the most commonly grown tree fruit in the world....
, cherries (large production in Cova da Beira and Alto Alentejo
Alto Alentejo Subregion
Alto Alentejo is a NUTS3 subregion of the Alentejo Region, in Portugal. It consists of 15 concelhos. It has a total area of 6,230 km² and a population of 127,025 ; thus 20,3 people/km².The chief city is Portalegre...
), and Oeste region's pêra rocha
Pêra Rocha
Pêra Rocha is an native Portuguese variety of pear. The earliest account of the Rocha variety dates from 1836, in the Sintra municipality. This variety was casually obtained from a seed, on Pedro António Rocha's farm. The variety derives its name from his family name. The Rocha pear is produced in...
(a type of pear
Pear
The pear is any of several tree species of genus Pyrus and also the name of the pomaceous fruit of these trees. Several species of pear are valued by humans for their edible fruit, but the fruit of other species is small, hard, and astringent....
). Other exports include horticulture and floriculture products, beet sugar, sunflower oil, cork
Cork (material)
Cork is an impermeable, buoyant material, a prime-subset of bark tissue that is harvested for commercial use primarily from Quercus suber , which is endemic to southwest Europe and northwest Africa...
, and tobacco.
Portugal's Exclusive Economic Zone
Portugal has the 3rd largest Exclusive Economic Zone of the EU and the 20th largest EEZ in the world, at 1,727,408 km2.-Portugal's Exclusive Economic Zone:*Continental Portugal 327,667 km2*Azores Islands 953,633 km2...
has 1,727,408 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
Petrochemistry
Petrochemistry is a branch of chemistry that studies the transformation of crude oil and natural gas into useful products or raw materials. These petrochemicals have become an essential part of the chemical industry today.-Origin of Petroleum:...
, cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
production, automotive and ship industries
Shipbuilding
Shipbuilding is the construction of ships and floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to before recorded history.Shipbuilding and ship repairs, both...
, electrical and electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
industries, machinery, pulp and paper industry
Pulp and paper industry
The global pulp and paper industry is dominated by North American , northern European and East Asian countries...
, injection moulding
Injection moulding
Injection molding is a manufacturing process for producing parts from both thermoplastic and thermosetting plastic materials. Material is fed into a heated barrel, mixed, and forced into a mold cavity where it cools and hardens to the configuration of the cavity...
, plastic products
Plastic
A plastic material is any of a wide range of synthetic or semi-synthetic organic solids used in the manufacture of industrial products. Plastics are typically polymers of high molecular mass, and may contain other substances to improve performance and/or reduce production costs...
, textile
Textile
A textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...
, footwear
Footwear
Footwear consists of garments worn on the feet, for fashion, protection against the environment, and adornment. Being barefoot is commonly associated with poverty, but some cultures chose not to wear footwear at least in some situations....
, leather
Leather
Leather is a durable and flexible material created via the tanning of putrescible animal rawhide and skin, primarily cattlehide. It can be produced through different manufacturing processes, ranging from cottage industry to heavy industry.-Forms:...
, furniture
Furniture
Furniture is the mass noun for the movable objects intended to support various human activities such as seating and sleeping in beds, to hold objects at a convenient height for work using horizontal surfaces above the ground, or to store things...
, ceramic
Ceramic
A ceramic is an inorganic, nonmetallic solid prepared by the action of heat and subsequent cooling. Ceramic materials may have a crystalline or partly crystalline structure, or may be amorphous...
s, beverages and food industry
Food industry
The food production is a complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population...
and cork
Cork (material)
Cork is an impermeable, buoyant material, a prime-subset of bark tissue that is harvested for commercial use primarily from Quercus suber , which is endemic to southwest Europe and northwest Africa...
(leader producer). Automotive and other mechanical industries are primarily located in and around Setúbal
Setúbal
Setúbal is the main city in Setúbal Municipality in Portugal with a total area of 172.0 km² and a total population of 118,696 inhabitants in the municipality. The city proper has 89,303 inhabitants....
, Porto
Porto
Porto , also known as Oporto in English, is the second largest city in Portugal and one of the major urban areas in the Iberian Peninsula. Its administrative limits include a population of 237,559 inhabitants distributed within 15 civil parishes...
, Lisbon
Lisbon
Lisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
, Aveiro, Braga
Braga
Braga , a city in the Braga Municipality in northwestern Portugal, is the capital of the Braga District, the oldest archdiocese and the third major city of the country. Braga is the oldest Portuguese city and one of the oldest Christian cities in the World...
, and Santarém
Santarém, Portugal
Santarém is a city in the Santarém Municipality in Portugal. The city itself has a population of 28,760 and the entire municipality has 64,124 inhabitants.It is the capital of Santarém District....
. Coimbra
Coimbra
Coimbra is a city in the municipality of Coimbra in Portugal. Although it served as the nation's capital during the High Middle Ages, it is better-known for its university, the University of Coimbra, which is one of the oldest in Europe and the oldest academic institution in the...
and Oeiras have growing technological-based industries, including pharmaceuticals and software. Sines
Sines, Portugal
Sines is a coastal municipality in the district of Setúbal, in the Alentejo Litoral region of the Portuguese Alentejo. Its population in 2011 was over 14260 residents, with a total area of 203.3 km², concentrated on the municipal seat of Sines.-History:...
is a major petrochemical
Petrochemical
Petrochemicals are chemical products derived from petroleum. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable sources such as corn or sugar cane....
centre. Maia
Maia, Portugal
Maia Municipality is located in the Porto Metropolitan Area, Grande Porto subregion, in Norte Region, Portugal. The city of Maia includes the parishes of Gueifães, Maia and Vermoim, and has 39,949 inhabitants. The Maia Municipality comprises 135,049 inhabitants in 17 parishes for a total land...
has one of the largest industrial parks of the country, including noted wood processing
Wood processing
Wood processing is an engineering discipline comprising the production of forest products, such as pulp and paper, construction materials, and tall oil...
and food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
industries. Figueira da Foz
Figueira da Foz
Figueira da Foz , also known as Figueira for short, is a municipality in the Coimbra District, in Portugal. It is located at the mouth of the Mondego River, 40 km west of Coimbra, and sheltered by hills ....
is a major centre of pulp and paper
Pulp and Paper
Pulp and Paper is the name of the largest United States-based trade magazine for the pulp and paper industry. See also: Paper engineering, Pulp and Paper Merit Badge...
industry. Marinha Grande is the most reputed glass making centre of Portugal. Leiria
Leiria
Leiria is a city in Leiria Municipality in the Centro Region, Portugal. It is the capital of Leiria District. The city proper has 50,200 inhabitants and the entire municipality has nearly 120,000...
, Oliveira de Azeméis
Oliveira de Azeméis
Oliveira de Azeméis Municipality is located in Oporto Metropolitan Area in Portugal. It has a total area of 163.5 km² and a total population of about 70,000 inhabitants. The city itself has a population of more than 15,000. Oliveira de Azeméis is part of Oporto Metropolitan Area and it is located...
, Vale de Cambra and Viseu
Viseu
Viseu is both a city and a municipality in the Dão-Lafões Subregion of Centro Region, Portugal. The municipality, with an area of 507.1 km², has a population of 99,593 , and the city proper has 47,250...
, have important light industries, including injection moulding
Injection moulding
Injection molding is a manufacturing process for producing parts from both thermoplastic and thermosetting plastic materials. Material is fed into a heated barrel, mixed, and forced into a mold cavity where it cools and hardens to the configuration of the cavity...
and plastics. Modern non-traditional technology-based industries like aerospace
Aerospace
Aerospace comprises the atmosphere of Earth and surrounding space. Typically the term is used to refer to the industry that researches, designs, manufactures, operates, and maintains vehicles moving through air and space...
, biotechnology
Biotechnology
Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
and information technology
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
, have been developed in several locations across the country. Alverca, Covilhã
Covilhã
Covilhã is a city in Covilha Municipality in Centro region, Portugal. The city proper has 36,723 inhabitants, and the municipality has an area of 555.6 km² with a total population of 53,501, being composed of 31 parishes. It is located in the Cova da Beira subregion, in the district of...
, Évora
Évora
Évora is a municipality in Portugal. It has total area of with a population of 55,619 inhabitants. It is the seat of the Évora District and capital of the Alentejo region. The municipality is composed of 19 civil parishes, and is located in Évora District....
, and Ponte de Sor are the main centres of Portuguese aerospace industry, which is led by Brazil-based company Embraer and the Portuguese company OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon
Lisbon Metropolitan Area
Lisbon Metropolitan Area is a territorial zone that includes 18 municipalities in Portugal. The smaller Grande Lisboa area is a subregion of the NUTS II Lisbon Region by its own right....
, Porto, Braga, Coimbra and Aveiro.
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 tradeTrade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
sector, due to the introduction of modern means of distribution, transport and telecommunications. Financial
FINANCIAL
FINANCIAL is the weekly English-language newspaper with offices in Tbilisi, Georgia and Kiev, Ukraine. Published by Intelligence Group LLC, FINANCIAL is focused on opinion leaders and top business decision-makers; It's about world’s largest companies, investing, careers, and small business. It is...
tertiary have benefited from privatisation, also gaining in terms of efficiency. Tourism in Portugal
Tourism in Portugal
Portugal attracts many tourists each year. In 2006, the country was visited by 12.8 million tourists. Tourism is playing an increasingly important role in Portugal's economy contributing with about 5% of the Gross Domestic Product ....
has developed significantly and generates approximately 5% of the wealth produced in Portugal.
Financial market
In the Portuguese financial marketFinancial market
In economics, a financial market is a mechanism that allows people and entities to buy and sell financial securities , commodities , and other fungible items of value at low transaction costs and at prices that reflect supply and demand.Both general markets and...
, the major stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
is the Euronext Lisbon
Euronext Lisbon
Euronext Lisbon is a stock exchange in Lisbon, Portugal. It belongs to the NYSE Euronext group, the first global stock exchange.Euronext Lisbon trades equities, public and private bonds, participation bonds, warrants, corporate warrants, investment trust units, and exchange traded funds...
which is part of the NYSE Euronext, the first global stock exchange. It is supervised and regulated by the Portuguese Securities Market Commission
Portuguese Securities Market Commission
The Portuguese Securities Market Commission , also known by its initials CMVM, was established in April 1991 with the task of supervising and regulating securities and other financial instruments markets , as well as the activity of all those who operate within said markets...
. The PSI-20
PSI-20
The PSI-20 is a benchmark stock market index of companies that trade on Euronext Lisbon, the main stock exchange of Portugal. The index tracks the prices of the twenty listings with the largest market capitalisation and share turnover in the PSI Geral, the general stock market of the Lisbon exchange...
is Portugal's most selective and widely known stock index. Portugal's central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
is the Banco de Portugal
Banco de Portugal
The Banco de Portugal is the central bank of the Republic of Portugal. Established by a royal charter of 19 November 1846 to act as a commercial bank and issuing bank, it came about as the result of a merger of the Banco de Lisboa and the Companhia de Confiança Nacional, an investment company...
, which is an integral part of the European System of Central Banks
European System of Central Banks
The European System of Central Banks is composed of the European Central Bank and the national central banks of all 27 European Union Member States.-Functions:...
. The largest Portuguese banks are Banco Comercial Português
Banco Comercial Português
Banco Comercial Português , is a Portuguese bank that was founded in 1985 and is the largest private bank in the country. BCP is a member of the Euronext 100 stock index and its current chief executive officer is Carlos Santos Ferreira. BCP is based in Porto, but its operations are headquartered...
and the state-owned Caixa Geral de Depósitos
Caixa Geral de Depósitos
Caixa Geral de Depósitos is a Portuguese state-owned banking corporation and the largest bank in Portugal.- History :*1876 — Caixa Geral de Depósitos was founded under the aegis of the Junta de Crédito Público....
. Portuguese banks hold strategic stakes in other sectors of the economy, including the insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
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
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
(EU) countries in terms of efficiency, profitability
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
, and asset
Asset
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset...
quality, with solvency
Solvency
Solvency, in finance or business, is the degree to which the current assets of an individual or entity exceed the current liabilities of that individual or entity. Solvency can also be described as the ability of a corporation to meet its long-term fixed expenses and to accomplish long-term...
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
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
sector has performed well, partly reflecting a rapid deepening of the market in Portugal. While sensitive to various types of market and underwriting risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
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.
Portugal's competitiveness in the world
The Global Competitiveness ReportGlobal Competitiveness Report
The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....
for 2005, published by the World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
, placed Portugal on the 22nd position, ahead of countries and territories like Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
and Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
. 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. The Global Competitiveness Index 2007-2008 placed Portugal on the 40th position out of 131 countries and territories. and in the 2008-2009 edition, it went even further down as Portugal was placed as the 43rd out of 134 countries and territories.
Competitiveness by city
A study concerning competitivenessCompetitiveness
Competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or country to sell and supply goods and/or services in a given market...
of the 18 Portuguese district capitals, complying with World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
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
Évora
Évora is a municipality in Portugal. It has total area of with a population of 55,619 inhabitants. It is the seat of the Évora District and capital of the Alentejo region. The municipality is composed of 19 civil parishes, and is located in Évora District....
, Lisbon
Lisbon
Lisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
and Coimbra
Coimbra
Coimbra is a city in the municipality of Coimbra in Portugal. Although it served as the nation's capital during the High Middle Ages, it is better-known for its university, the University of Coimbra, which is one of the oldest in Europe and the oldest academic institution in the...
. , ,
Ranking:
- 1.ÉvoraÉvoraÉvora is a municipality in Portugal. It has total area of with a population of 55,619 inhabitants. It is the seat of the Évora District and capital of the Alentejo region. The municipality is composed of 19 civil parishes, and is located in Évora District....
: 7,293 - 2.LisbonLisbonLisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
: 6,454 - 3.CoimbraCoimbraCoimbra is a city in the municipality of Coimbra in Portugal. Although it served as the nation's capital during the High Middle Ages, it is better-known for its university, the University of Coimbra, which is one of the oldest in Europe and the oldest academic institution in the...
: 6,042 - 4.BejaBeja (Portugal)Beja is a city in the Beja Municipality in the Alentejo region, Portugal. The municipality has a total area of 1,147.1 km² and a total population of 34,970 inhabitants. The city proper has a population of 21,658....
: 5,660 - 5.LeiriaLeiriaLeiria is a city in Leiria Municipality in the Centro Region, Portugal. It is the capital of Leiria District. The city proper has 50,200 inhabitants and the entire municipality has nearly 120,000...
: 5,609 - 6.Castelo BrancoCastelo Branco, PortugalThe city of Castelo Branco is made up of one parish with a population of 30,649.It is located in Castelo Branco Municipality in Castelo Branco District.-History and landmarks:...
: 5,608 - 7.Aveiro: 5,452
- 8.GuardaGuarda, PortugalGuarda is a city in Guarda Municipality, Portugal. The city has a population of 32 111Guarda was founded in 1199 by the second king of Portugal, Sancho I....
: 5,178 - 9.SantarémSantarém, PortugalSantarém is a city in the Santarém Municipality in Portugal. The city itself has a population of 28,760 and the entire municipality has 64,124 inhabitants.It is the capital of Santarém District....
: 5,037 - 10.Portalegre: 4,711
- 11.ViseuViseuViseu is both a city and a municipality in the Dão-Lafões Subregion of Centro Region, Portugal. The municipality, with an area of 507.1 km², has a population of 99,593 , and the city proper has 47,250...
: 4,628 - 12.Vila Real: 5,514
- 13.Bragança: 4,271
- 14.SetúbalSetúbalSetúbal is the main city in Setúbal Municipality in Portugal with a total area of 172.0 km² and a total population of 118,696 inhabitants in the municipality. The city proper has 89,303 inhabitants....
: 4,070 - 15.BragaBragaBraga , a city in the Braga Municipality in northwestern Portugal, is the capital of the Braga District, the oldest archdiocese and the third major city of the country. Braga is the oldest Portuguese city and one of the oldest Christian cities in the World...
: 4,055 - 16.FaroFaro, PortugalFaro is the southernmost city in Portugal. It is located in the Faro Municipality in southern Portugal. The city proper has 41,934 inhabitants and the entire municipality has 58,305. It is the seat of the Faro District and capital of the Algarve region...
: 3,971 - 17.Viana do Castelo: 3,859
- 18.PortoPortoPorto , also known as Oporto in English, is the second largest city in Portugal and one of the major urban areas in the Iberian Peninsula. Its administrative limits include a population of 237,559 inhabitants distributed within 15 civil parishes...
: 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 forestryForestryForestry is the interdisciplinary profession embracing the science, art, and craft of creating, managing, using, and conserving forests and associated resources in a sustainable manner to meet desired goals, needs, and values for human benefit. Forestry is practiced in plantations and natural stands...
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 80% of GDP on 2009 figures. 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. From the XVI Governo Constitucional government, headed by Prime Minister José Durão Barroso, to the XVII Governo Constitucional government, headed by Prime Minister José SócratesJosé SócratesJosé Sócrates Carvalho Pinto de Sousa, GCIH , commonly known by José Sócrates , is a Portuguese politician who was the Prime Minister of Portugal from 12 March 2005 to 21 June 2011....
(which tried to create new rules and implement reforms aiming at better efficiency, rationalized resource allocation, fight civil servant excedentary overcapacity (excedentários) and less bureaucracy for both citizens and companies – e.g.: empresa na hora http://www.empresanahora.pt/, PRACE – Programa de Reestruturação da Administração Central do Estado , and SIMPLEX – Programa de Simplificação Administrativa e Legislativa, among others), the "public expenditure problem" has been a major concern in Portugal, however it had little effect, and the country's public debt and deficit were both out of control by 2010. In addition, João Bilhim who directed in 2005 the committee responsible for the Programme for Restructuring the State's Central Administration (PRACE) said to be disappointed with the results of the reforms tried in the mid-2000s. - Corruption: 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 mediaNews mediaThe news media are those elements of the mass media that focus on delivering news to the general public or a target public.These include print media , broadcast news , and more recently the Internet .-Etymology:A medium is a carrier of something...
, 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. Notable criminal casesCrime in PortugalCrime in Portugal is characterized by low levels of gun violence and homicide, compared to other developed countries. Crime statistics are compiled annually by the Portuguese Ministry of Internal Administration and the Polícia de Segurança Pública which represents crimes reported to the police.The...
include the Face OcultaFace OcultaFace Oculta is a Portuguese nationwide political corruption, money-laundering and corporate tax evasion scandal, first noticed in October 2009. The Polícia Judiciária investigated the business group headed by Manuel Godinho, suspected of economic crimes and bribery of managers of public funds...
, the Oeiras Municipality Mayor Isaltino Morais scandal, the Apito DouradoApito DouradoThe Apito Dourado affair is a corruption sports scandal in Portuguese football that first arose in 2004. Portuguese Judiciary Police investigators named several football personalities as suspects of corrupting or attempting to corrupt referees, including Jorge Nuno Pinto da Costa, chairman of...
and the Saco Azul de FelgueirasFátima FelgueirasMaria de Fátima da Cunha Felgueiras is the mayor of the Felgueiras municipality, in northern Portugal.-Personal life:...
. According to the 2008 Corruption Perceptions IndexCorruption Perceptions IndexSince 1995, Transparency International publishes the Corruption Perceptions Index annually ranking countries "by their perceived levels of corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as "the misuse of public power for private...
of countries published by Transparency InternationalTransparency InternationalTransparency International is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide...
, Portugal had the 32nd lowest level of corruption, out of 180 countries. In 2009 it had slumped to the 35th place.
Education, training and research in business and economic sciences
There are several higher educationHigher education in Portugal
Higher education in Portugal is divided into two main subsystems: university and polytechnic education. It is provided in autonomous public universities, private universities, public or private university institutes, polytechnic institutions and higher education institutions of other types...
institutions awarding academic degrees in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
and business management across the whole country. Almost every polytechnical institute
Polytechnic (Portugal)
A polytechnic is a higher education educational institution in Portugal created in the 1980s. After 1998 they were upgraded to institutions which are allowed to confer licenciatura degrees. Before then, they only awarded short-cycle degrees which were known as bacharelatos and didn't provide...
have programmes in management and administration. All state-run universities have programmes in economics. Among the largest and most reputed universities
University
A university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university is an organisation that provides both undergraduate education and postgraduate education...
which host an economics department and develop research on economics, are the Technical University of Lisbon
Technical University of Lisbon
The Technical University of Lisbon is a Portuguese public university. It was created in 1930 in Lisbon, as a confederation of older schools, and comprises, nowadays, the faculties and institutes of veterinary medicine; agricultural sciences; economics and business administration; engineering,...
(through its Instituto Superior de Economia e Gestão – ISEG), ISCTE – Lisbon University Institute, the Portuguese Catholic University at Lisbon (through its Faculdade de Ciências Económicas e Empresariais – FCEE), the University of Porto
University of Porto
The University of Porto is a Portuguese public university located in Porto, and founded 22 March 1911. It is the largest Portuguese university by number of enrolled students and has one of the most noted research outputs in Portugal...
(through its Faculdade de Economia da Universidade do Porto – FEP); the New University of Lisbon
New University of Lisbon
Universidade NOVA de Lisboa, , also known as NOVA ) was established in 1973 and is the youngest of the three public universities of Lisbon, in Portugal....
(through its Nova School of Business and Economics – NOVASBE); 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.