Following the trend of its European partners, over the last decades one of the most important characteristics of the structure of the Portuguese economy is the increase in the services sector, that contributed, in 2012, with 79.3% of GVA and employed 63.9% of the population. Agriculture, forestry and fishing generated only 2.2% of GVA (compared with 24% in 1960), and 10.5% of employment, while industry, construction, energy and water represented 23.4% of GVA and 25.6% of employment.
In the last decade, apart from a greater focus and diversification of services within the economic activity, there was, in the transformation industry in Portugal a significant change in its specialization. Coming from a dependence on traditional industrial activities to a situation where new sectors, with a larger amount of technology, have gained importance and significant growth, sectors such as the automotive and components sector, electronics, energy, pharmaceutical sector and industries related to new technologies of information and telecommunications.
Moreover, Portugal’s geographic position also impacts on the growth of the services sector. The mild Mediterranean climate, regulated by the influence of the Atlantic, together with its extensive coastline, are significant factors driving the growth of the tourism industry.
Current economic situation and outlook:
The gradual improvement of demand on a global scale and of the economy of our main trade partners, which started at the end of 2009, allowed Portugal to retake a growth trajectory in 2010 (GDP rose 1.9% during the same period). The main reason for that recovery was the performance of our exports.
During the following years, the consequent sovereign-debt crisis in the Euro Zone, and the deterioration of the conditions to access international financial markets, had a strong impact in the Portuguese economy characterized by a high level of external debt and a tendency for low economic growth, combined with an excessive and growing public deficit, culminated in the request for financial assistance from the European Union and the IMF (April 2011 until 2014).
After two years of the Financial and Economic Assistance Programme, the Bank of Portugal considered that the Portuguese economy registered a noticeable improvement in regards to the external rebalance and to the structural reduction of the primary budget deficit, a drop in economic activity and an increase in unemployment.
The Portuguese economy suffered a contraction in the last few years (-1.6% in 2011 and -3.2% in 2012), due to the decrease of internal demand. From 2014 an improvement is expected, as forecasts indicate a slight increase (+0.6%), after a drop in GDP of 2.3% forecasted for 2013.