Portugal: Economy Overview

Portugal has become a diversified and increasingly service-based economy since joining the European Community 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.

Economy Overview

The country qualified for the European Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU member economies. Economic growth had been above the EU average for much of the 1990s, but fell back in 2001-08. GDP per capita stands at roughly two-thirds of the EU-27 average. A poor educational system, in particular, has been an obstacle to greater productivity and growth. Portugal has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. The budget deficit surged to an all-time high of 6% of GDP in 2005, but the government reduced the deficit to 2.6% in 2007 - a year ahead of Portugal's targeted schedule. Nonetheless, the government faces tough choices in its attempts to boost the economy, which declined 0.1% in 2008, while keeping the budget deficit within the euro-zone 3%-of-GDP ceiling. In 2009, the deficit reached 6.7% of GDP.

GDP (purchasing power parity):

$240.9 billion (2009 est.)
country comparison to the world: 50
$247.3 billion (2008 est.)
$247.3 billion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):

$233.5 billion (2009 est.)

GDP - real growth rate:

-2.6% (2009 est.)
country comparison to the world: 159
0% (2008 est.)
2.4% (2007 est.)

GDP - per capita (PPP):

$22,500 (2009 est.)
country comparison to the world: 56
$23,200 (2008 est.)
$23,200 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 2.7%
industry: 23%
services: 74.3% (2009 est.)

Labor force:

5.583 million (2009 est.)
country comparison to the world: 67

Labor force - by occupation:

agriculture: 10%
industry: 30%
services: 60% (2007 est.)

Unemployment rate:

9.5% (2009 est.)
country comparison to the world: 113
7.6% (2008 est.)

Investment (gross fixed):

19.5% of GDP (2009 est.)
country comparison to the world: 101

Budget:

revenues: $97.06 billion
expenditures: $119.1 billion (2009 est.)

Inflation rate (consumer prices):

-0.8% (2009 est.)
country comparison to the world: 12
2.6% (2008 est.)

Commercial bank prime lending rate:

6.12% (31 December 2009 est.)
country comparison to the world: 114
8.35% (31 December 2008 est.)

Stock of domestic credit:

$556.3 billion (31 December 2009 est.)
country comparison to the world: 24
$490.8 billion (31 December 2008 est.)

Agriculture - products:

grain, potatoes, tomatoes, olives, grapes; sheep, cattle, goats, swine, poultry, dairy products; fish

Industries:

textiles, clothing, footwear, wood and cork, paper, chemicals, auto-parts manufacturing, base metals, diary products, wine and other foods, porcelain and ceramics, glassware, technology, telecommunications; ship construction and refurbishment; tourism

Industrial production growth rate:

-7.7% (2009 est.)
country comparison to the world: 131

Oil - production:

4,721 bbl/day (2009 est.)
country comparison to the world: 95

Natural gas - production:

NA (2008 est.)

Current account balance:

$-23.95 billion (2009 est.)
country comparison to the world: 181
$-31.85 billion (2008 est.)

Exports:

$44.49 billion (2009 est.)
country comparison to the world: 49
$57.87 billion (2008 est.)

Exports - commodities:

agricultural products, food products, oil products, chemical products, plastics and rubber, skins and leather, wood and cork, wood pulp and paper, textile minerals, clothing, footwear, minerals and mineral products, base metals, machinery and tools, vehicles and other transport material, and optial and precision instruments

Exports - partners:

Spain 26.25%, Germany 12.99%, France 12.04%, Angola 7.21%, UK 5.54% (2009)

Imports:

$68.9 billion (2009 est.)
country comparison to the world: 35
$91.66 billion (2008 est.)

Imports - commodities:

agricultural products, food products, oil products, chemical products, plastics and rubber, skins and leather, wood and cork, wood pulp and paper, textile materials, clothing, footwear, minerals and mineral products, base metals, machinery and tools, vehicles and other transport material, and optical and precision instruments, computer accessories and parts, semi-conductors and related devices, household goods, passenger cars new and used, and wine products

Imports - partners:

Spain 31.58%, Germany 12.41%, France 8.58%, Italy 5.55%, Netherlands 5.31% (2009)

Debt - external:

$507 billion (30 June 2009)
country comparison to the world: 19
$484.7 billion (31 December 2008)

Stock of direct foreign investment - at home:

$102.6 billion (31 December 2009 est.)
country comparison to the world: 32
$99.82 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:

$63.64 billion (31 December 2009 est.)
country comparison to the world: 27
$63.64 billion (31 December 2008 est.)

Exchange rates:

Source: CIA - The World Factbook