Business Monitor International

Portugal Business Forecast Report

Published 24 September 2014

  • 33 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Portugal Business Forecast Report

Core Views

  • Portugal's exit of its three-year international bailout programme in May 2014 will fail to herald an era of stability for the financially beleaguered country. In addition, the government's recent decision to bailout a private lender will further stoke public discontent with the centre-right government. With general elections to be held in October 2015, we expect public support to continue shifting towards leftist and fringe parties, dimming the outlook for structural reform from 2015 onwards.

  • Portugal is poised to register limited current account surpluses over the next few years. However, as import growth recovers with domestic demand, the momentum behind the current account surplus expansion will wane, and we expect the surplus to flip back into deficit by 2018.

Forecast Changes

  • We have downgraded our forecast for export growth for 2014 - to 3.0% from 5.0% previously - due to a one-off drop in export levels from oil company Galp Energia, following planned maintenance at the company's oil refinery in H114. Our downward revision for exports has also resulted in our adjustment of our current account balance forecast to 0.2% of GDP from 1.0% previously for 2014, and to 0.6% of GDP from 1.5% previously for 2015.

Risks To Outlook

  • Upside Risks To Economic Outlook: At present, we do not envisage long-term real GDP growth rising much above 1.7% in the latter part of our long-term forecasts to 2023. However, we would upgrade our forecasts upon evidence that the government's structural economic reform package is making headway.

Macroeconomic Forecasts (Portugal 2012-2015)
Indicator 2012 2013 2014f 2015f
National Sources/BMI
Real GDP growth, % y-o-y -3.2 -1.4 0.6 1.1
Nominal GDP, EURbn 165.4 162.0 166.4 170.4
Consumer price inflation, % y-o-y, eop 2.8 1.4 1.3 1.4
Exchange rate EUR/USD, eop 0.81 0.75 0.79 0.83
Budget balance, % of GDP -6.4 -6.3

Table of Contents

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
Support For Leftist And Fringe Parties To Rise
TABLE: political overview
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Lender Collapse To Stop Consumer-Led Recovery In Its Tracks
TABLE: Economic Activity
Balance Of Payments
Modest Current Account Surpluses In 2014-2017
TABLE: Current Account
Regional Monetary Policy
ECB Easing: Signs Of Growing Anxiety
Chapter 3: 10-Year Forecast
The Portuguese Economy To 2023
Crisis An Opportunity To Improve Long-Term Growth
TABLE: Long-Term Macroeconomic Forecasts
Chapter 4: Business Environment
SWOT Analysis
BMI Business Environment Risk Ratings
Chapter 5: Key Sectors
TABLE: Total Electricity Generation, Historical Data And Forecasts
TABLE: Total Electricity Generation, Long-Term Forecasts
Other Key Sectors
Table: Autos Sector Key Indicators
Table : Pharma Sector Key Indicators
Table: Infrastructure Sector Key Indicators
Table: Telecoms Sector Key Indicators
Chapter 6: BMI Global Assumptions
Global Outlook
Eurozone Downgrade On Poor Q214
Table: Global Assumptions
Table : Developed States , Real GDP Growt H, %
Table : Emergi ng Markets , Real GDP Growth , %

The Portugal Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Portugal and 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-2018, 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-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Portugal's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Portugal, including currency volatility, the commodity price boom and protectionist policies.

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

Economic Outlook:

How will the Portugal economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Portugal through end-2018 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 Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, 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 Rankings 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 exposure).
  • Global Assumptions - forecasts for each year to end-2018 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 Rankings evaluate 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 Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings 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.

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.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Portugal, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Portugal's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

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

BMI's 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 with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all 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.

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The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express