Portugal is a developed & high income country. It began modernizing its economy in the late 20th century, expanding it from a primarily textile & livestock one to a one that today includes a range of manufactures & services.
It has become a diversified and increasingly service-based economy since joining the European Community (EU) in 1986. Since joining the EU, successive governments have privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country joined the Economic and Monetary Union in 1999 and began circulating the euro on 1 January 2002 along with 11 other EU members.
The economy grew by more than the EU average for much of the 1990s, but the rate of growth slowed in 2001-08. After the global financial crisis in 2008, Portugal’s economy contracted in 2009 and fell into recession from 2011 to 2013, as the government implemented spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, signed in May 2011. Portugal successfully exited its EU-IMF program in May 2014, and its economic recovery gained traction in 2015 because of strong exports and a rebound in private consumption. Unemployment, which peaked at 18% in 2013 has now come down to 6.7% in Q3 of 2018. Further, the budget deficit fell from 11.2% of GDP in 2010 to 1.8% in 2017, the country’s lowest since democracy was restored in 1974, and surpassing the EU and IMF projections of 3%.
Today, tourism continues to be a major contributor to the GDP with 17.3% in 2017. The number of foreign tourists travelling to the country jumped 12% in 2017 to 12.7 million. With another 9 million domestic tourists (taking the total to 21 million tourists in 2017), it is not difficult to ascertain why this sector continues to be a major focus for the country.
The major natural resource of Portugal is Forests, covering 34% of the country. The most important forest resources are pine trees, cork oaks, holm oaks & eucalyptus. Portugal produces half of the world’s cork. It is also ranked amongst Europe’s leading copper producers. Other significant mining resources include lithium, tungsten, tin & uranium.
Presently, the major industries in Portugal include tourism, wine, wood & cork, paper & pulp, machinery, electrical & electronics, automotive, shipbuilding, injection moulding, plastics & ceramics, textile, minerals, footwear, leather, beverages & foodstuffs, oil refinery, petrochemicals & cement. Modern non-traditional technology-based industries like aerospace, biotechnology & information technology have also been developed in several locations across the country.
Primary Exports :
Portugal has been a traditional wine grower & has exported its wines since the dawn of western civilization. Today, it is one of the most noted Portuguese exports & is the 7th largest exporter of the product worldwide, by value. Other notable exports include agricultural products, foodstuffs, wine, oil products, chemical products, plastics and rubber, hides, leather, wood and cork, wood pulp and paper, textile materials, clothing, footwear, machinery and tools & base metals.
Primary Imports :
Agricultural products, chemical products, vehicles and other transport material, optical and precision instruments, computer accessories and parts, semiconductors and related devices, oil products, base metals, food products & textile materials.