Portugal has become an expanded and progressively service-based economy after joining the European Community in 1986. Over the decades, the government transferred many state-controlled firms and liberalized key areas of the economy, which includes the financial and telecommunication sectors.
Portugal joined the Economic and Monetary Union in 1999 and started circulating the euro on 2002 along with eleven other European Union members. Portugal grew by more than the European Union average for the rest of the 1990s; however the growth began to slow down in 2001 to 2008.
In accordance to this, the economy of Portugal contracted in 2009 and fell gain from 2011 to 2014, while the government executed spending cuts and tax increases to comply with conditions of an EU-IMF financial rescue package, which is signed in 2011. In 2013, due to strong export performance and a rebound in private consumption, Portugal’s economic status recovered.
However, severity measures were introduced to reduce the large budget deficit, which contributed to record unemployment and wave of emigration that is not seen since the 1960s. In addition to this, a continued reduction in private and public sector debt could weigh on consumption and investment in 2016, holding back a stronger recovery.
However, Portugal’s leading indicators suggested that the country’s economy entered Q2 of 2017 on a solid footing with both consumer confidence and economic sentiment that has hit multi-year highs in May. In addition to this, A booming tourist sector, resilient demand from the Eurozone, a declining unemployment rate and timid gains in wage growth following years of stagnation are driving Portugal’s economic recovery.
This data is more comprehensive and is confirmed that Portugal’s economy expanded at the fastest pace in 7 years in Q1 of 2017, with GDP rising at 1.0% over the previous quarter in seasonally-adjusted terms.