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
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Core Views

  • Portugal's rebound will remain on track in 2016 underpinned by fiscal expansion by the new Socialist government, and continued rebound in private consumption. However, growth will peak in 2016, and slow down in the coming years, as delayed structural reforms and high debt levels will impede Portugal's ability to develop its productive capacities and shift away from consumption dependence and towards production and export- oriented growth model.

  • While weeks of political stalemate following Portugal's October 4 general election ended with the Socialist Party being invited to form a minority government on November 24, political uncertainty will remain in play in the coming quarters. Reversal of austerity will result in the deterioration in Portuguese fiscal and debt metrics. While we expect a rise in the political risk premium, ECB backstops will prevent an excessive rise in Portugal's government debt yields.

Forecast Changes

  • We have adjusted upward our real GDP growth forecast for 2016 - to 1.7% from 1.6% previously as the positive impact on growth from lower oil prices, weaker euro and liquidity boost to the banking sector from the European Central Bank's quantitative easing programme seem to be slightly stronger than we initially estimated. Nevertheless, we maintain our subdued growth outlook for the country in the medium- to long term, mainly on account of Portugal's hefty debt burden and delayed structural reform, which will limit the country's growth potential.

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 2013-2016)
Indicator 2013 2014 2015f 2016f
National Sources/BMI
Real GDP growth, % y-o-y -1.6 0.9 1.5 1.7
Nominal GDP, EURbn 169.4 173.1 180.5 187.9
Consumer price inflation, % y-o-y, eop 0.2 -0.3 1.4 1.4
Exchange rate EUR/USD, eop 0.72 0.83 0.95 0.91
Budget balance, % of GDP -4.8 -4.5 -3.4 -3.2
Current account balance, % of GDP 0.5 0.6 1.0 1.1
Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Election Preview: Centre-Left To Win Election Despite Drop In Popularity
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Cyclical Upswing In Play, But Debt Burden Capping Growth Potential
Table: Eco nomic Acti vit y
Chapter 3: 10-Year Forecast
The Portuguese Economy To 2024
Crisis An Opportunity To Improve Long-Term Growth
Table: Lo ng-Ter m Macroeco nomic Forec asts
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Chapter 5: Key Sectors
Pharmaceuticals & Healthcare
Table: Pharmaceutical Sales, Historical Data And Forecasts
Table: Healthcare Expenditure Trends, Historical Data And Forecasts
Other Key Sectors
Table: Telecoms Sector Key Indicators
Table: Infrastructure Sector Key Indicators
Table: Autos Sector Key Indicators
Chapter 6: BMI Global Macro Outlook
Global Macro Outlook
China Crisis To Have Far-Reaching Impact
Table: Global Assumptions
Table: Developed States, Real GDP Growth, %
Table: Emerging Markets, Real GDP Growth , %

The Portugal Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Portugal. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Portugal's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Portugal's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Portugal's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Portugal, including currency volatility, the commodity price boom and protectionist policies.

The Portugal Country Risk Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Operational Risk and Key Sector Outlook.

Economic Outlook:

How will the Portugal' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Portugal through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Portugal Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Portugal and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Portugal, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Portugal over the next 5-years?

BMI's Portugal country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Portugal Market - Political Strengths, Weaknesses, Opportunities and Threats facing Portugal.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Portugal's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Portugal’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Portugal's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Portugal?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Portugal against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

Key Sector Outlook*

Which industry sectors in Portugal will grow fastest, and where are the major investment opportunities in the market?

BMI identifies investment opportunities in Portugal's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry, including recent sector developments and major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2015-2019, using BMI's proprietary industry modelling technique, which incorporates key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across and within each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

*Not all Country Reports contain the Key Sector Outlook chapter. Please enquire above for more information.