Portugal Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Portugal Country Risk Report
Product Price
$1,195.00

Core Views

  • Portugal's economic recovery will continue in the coming quarters, as policy reversal under the new administration away from austerity will boost household spending, which will be the main driver of growth in 2016-2017. However, the recovery will proceed at a modest pace, as a debt overhang and precarious credit market conditions will remain a major impediment to a faster pace of growth.

  • Portugal's Socialist Party-led minority government will become increasingly unstable as it walks an ever tighter rope between fulfilling demands for fiscal prudence by its bailout creditors and demands for better workers' rights by domestic labour unions. Nevertheless, the government will weather the crisis for now, as a politically sensitive environment in the European Union in light of 'Brexit' risks will underpin the creditors' leniency on Portugal's austerity relaxation course.

Forecast Changes

  • Economic growth in Portugal entered a soft patch in the beginning of 2016, as reflected in real GDP growth slowing to 0.9% y-o-y in Q116, from 1.3% the previous quarter. Nevertheless, with these headwinds now broadly behind us, we remain of the view that the rebound in the Portuguese economy will proceed in the coming quarters, with private consumption acting as the main driver of growth. As such, Portugal's rebound from its three-year long recession in 2011-2013 will remain broadly in place in 2016, as reflected in our forecast for a 1.6% full-year expansion of real GDP growth. We retain our subdued growth outlook for the country and have not modified our forecasts for 2016.

Key Risks

Risks to Portugal's growth outlook stem from the possibility that there emerge disagreements between the ruling Socialist Party and the two radical left-wing parties that will support the Socialist-led minority government, i.e. the Left Bloc and the Socialist Party. If the two far left parties raise demands over a more radical policy trajectory for Portugal, for instance eurozone exit, this could have dramatically negative impact on the political stability outlook for the country and market perceptions of its sovereign risk profile.

Macroeconomic Forecasts (Portugal 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 0.9 1.5 1.7 1.6
Nominal GDP, EURbn 173.4 179.4 190.1 196.7
Consumer price inflation, % y-o-y, eop -0.3 0.3 1.2 1.5
Exchange rate EUR/USD, eop 0.82 0.92 0.91 0.87
Budget balance, % of GDP -4.5 -3.4 -3.2 -3.0
Current account balance, % of GDP 0.6 1.0 1.1 0.9
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Growth Prospects Are Tepid
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Regional Monetary Policy
11
ECB Easing Throws A Lifeline To Banks
11
Chapter 2: 10-Year Forecast
13
The Portuguese Economy To 2025
13
Crisis An Opportunity To Improve Long-Term Growth
13
TABLE: LONG-TERM MACROECONOMIC FORECASTS
13
Chapter 3: Political Outlook
15
SWOT Analysis
15
BMI Political Risk Index
15
Domestic Politics
16
Emboldened Unions Spelling End Of Austerity
16
Chapter 4: Operational Risk
19
SWOT Analysis
19
Operational Risk Index
19
Chapter 5: BMI Global Macro Outlook
21
Global Macro Outlook
21
Summer Of Risk
21
TABLE: GLOBAL ASSUMPTIONS
21
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
22
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
23
TABLE: MACROECONOMIC DATA & FORECASTS
25

Assess your risk exposure in Portugal with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Portugal with confidence.

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