Portugal: country overview10 July 2012
by Ina Dimireva -- last modified 12 February 2013
Portugal has become a diversified and increasingly service-based economy since joining the European Community - the EU's predecessor - in 1986. Over the past two decades, successive governments have privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors.
Year of EU entry: 1986
Member of Schengen area: Yes
Political system: Republic
Capital city: Lisbon
Total area: 92 072 km²
Population: 10.8 million
Listen to the official EU language: Portuguese
Portugal, a country with a rich history of seafaring and discovery, looks out from the Iberian Peninsula onto the Atlantic Ocean. Portugal's history has had a lasting impact on the culture of the country: Moorish and Oriental influences in architecture and the arts are prominent.
Over the past 3 000 years, Portugal has witnessed a constant ebb and flow of civilisations. Phoenician, Greek, Celt, Carthaginian, Roman and Arabic cultures have all left their imprint. In the 15th century, Portugal’s intrepid maritime explorers led by Vasco da Gama discovered new territories, leading to the accumulation of an overseas empire. At home, the university of Coimbra, established in 1290, is one of the oldest in Europe.
The President, elected for a five-year term by universal suffrage, has limited powers. The parliament has 230 members, whose mandate is for four years.
Portugal has always been well represented in the arts. Famous poets include Luís de Camões and Fernando Pessoa. No less creative are the talents of international footballer Cristiano Ronaldo.
During the month of June, festivities dedicated to three saints known as Santos Populares (popular saints) take place all over Portugal. They are characterised by folk dance and music, particularly the traditional melancholy fado .
Each region of Portugal has its traditional dishes made with various kinds of meat and seafood. In particular, the country is particularly well known for its one hundred ways of cooking cod.
Portugal has become a diversified and increasingly service-based economy since joining the European Community - the EU's predecessor - in 1986. Over the following two decades, successive governments privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country qualified for the Economic and Monetary Union (EMU) in 1998 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. The economy contracted 2.5% in 2009, before growing 1.4% in 2010, but GDP fell again in 2011 and 2012, as the government began implementing spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, agreed to in May 2011. GDP per capita stands at roughly two-thirds of the EU-27 average. Portugal also has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a destination for foreign direct investment, in part because its rigid labor market hindered greater productivity and growth. However, the government of Pedro PASSOS COELHO has enacted several measures to introduce more flexibility into the labor market, and, this, along with steps to reduce high levels of public debt, could make Portugal more attractive to foreign investors. The government reduced the budget deficit from 10.1% of GDP in 2009 to 4.5% in 2011, an achievement made possible only by the extraordinary revenues obtained from the one-time transfer of bank pension funds to the social security system. The budget deficit worsened in 2012 as a sharp reduction in domestic consumption took a bigger bite out of value-added tax revenues while rising unemployment benefits increased expenditures more than anticipated. Poor growth prospects over the next year have reinforced investors' concerns about the government's ability to achieve its budget deficit targets and regain full access to bond market financing when the EU-IMF financing program expires in 2013.
Source: Europa, CIA World Factbook