Business Monitor International


Portugal Business Forecast Report

Published 26 March 2014

  • 33 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
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. With the official completion of the programme reducing international pressure for structural reform, we see domestic opposition to budget consolidation and public sector restructuring increasingly on the rise.

  • We have slightly revised up our forecast for Portuguese real GDP growth for 2014 on account of a stronger than expected Q114 growth reading. Nevertheless, we reiterate our downbeat outlook for Portugal's long-term growth prospects, and we expect the country to register below pre-2009 growth levels for the foreseeable future.

  • Weaker-than-expected growth will undermine the government's revenue raising ability. We maintain that a precautionary credit line with the troika of international lenders is likely when the current financial programme ends in May 2014.

Forecast Changes

The above-consensus real GDP growth reading in Q114 in Portugal surprised both our and market expectations to the upside, and has prompted us to revise upwards our 2014 growth forecasts - to 0.5% from 0.4% previously. Nevertheless, we remain below Bloomberg economists' consensus of 0.8% and we retain a subdued outlook for Portuguese economic growth for the foreseeable future due to the country's limited prospects of substantially enhancing its export competitiveness.

Risks To Outlook

  • Downside Risks To Growth Forecast: The biggest immediate danger for Portugal is a deepening of the sovereign debt crisis, either for its own government or in another eurozone country, which would not only depress domestic confidence and external demand but will also temper investor demand for sovereign bonds, which might see yields, and as a result borrowing costs rise and jeopardise the government's precarious finances.

  • Upside Risks To Economic Outlook: At present, we do not envisage long-term real GDP growth rising much...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Mounting Domestic Risks To Fiscal Consolidation Efforts
8
TABLE: political overview
8
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Ratings
11
Economic Activity
12
Tepid Growth Ahead Despite A Strong Q114
12
table: GDP By Expenditure
12
Balance Of Payments
14
Momentum Behind External Rebalancing To Wane
14
table: Balance Of Payments
14
Regional Economic Outlook
15
Assessing The Aftermath Of ECB Policy Action
15
Chapter 3: 10-Year Forecast
19
The Portuguese Economy To 2023
19
Crisis An Opportunity To Improve Long-Term Growth
19
Table: Long-Term Macroeconomic Forecasts
19
Chapter 4: Business Environment
23
SWOT Analysis
23
BMI Business Environment Risk Ratings
23
Chapter 5: Key Sectors
25
Pharmaceuticals & Healthcare
25
table: Pharmaceutical Sales, Historical Data And Forecasts
26
table: Healthcare Expenditure Trends, Historical Data And Forecasts
27
table: Government Healthcare Expenditure Trends, Historical Data And Forecasts
28
table: Private Healthcare Expenditure Trends, Historical Data And Forecasts
28
Other Key Sectors
29
Table: Telecoms Sector Key Indicators
29
table: Infrastructure Sector Key Indicators
29
table: Autos Sector Key Indicators
29
Chapter 6: BMI Global Assumptions
31
Global Outlook
31
Emerging Market Deceleration
31
Table: Global Assumptions
31
Table: Developed States, Real GDP GrowtH, %
32
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
32
Table: Emerging Markets, Real GDP Growth, %
33

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-2017, 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-2017.
  • 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 2013-2017?

BMI provides our fully independent 5-year forecasts for Portugal through end-2017 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 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • 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-2017 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 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, 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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Testimonials

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