After suffering a deep and painful recession following the Eurozone debt crisis, the Portugese economy is now experiencing a major turnaround. Quarter-on-quarter growth for the third quarter of 2017 was 0.5%, up from 0.3% the previous quarter, driven by higher consumer confidence and increased consumption, healthy export levels and an ongoing recovery in the labour market.
A critical turning point in the country’s recovery from a situation that almost brought it to the brink of defaulting on its loans five years ago came in September when Standard & Poor’s upgraded the nation’s credit rating by one notch, taking it from junk (BB+) to the lowest investment status (BBB-) thanks to a more stable outlook. Fitch followed suit in December, upgrading its rating by two notches to BBB.
Growth is also expected to continue over the year ahead, although it is predicted to slow to 2.2% in 2018 from 2.6% the previous year as export levels start to fall.
Interestingly though, half of the so-called ‘New World’ once belonged to Portugal, which is why Portuguese happens to be the native tongue of countries as diverse as Brazil, Mozambique and Angola. The language is also spoken in Goa in East India, Macao and East Timor, showing just how far the country’s influence once spread.
While Portugal does not have quite the same international reach as it once did, it still plays its part in the global economy as a member of the European Union (EU). In fact, for a relatively small nation, it would be fair to say that it punches well above its weight in global markets and boasts some of the biggest firms around, albeit in less than glamorous industries.
As a result, the country is home to leading paper and pulp manufacturer, Portucel Soporcel, and Sonae Industria, the largest producer of wood panelling in the world. It also boasts Conservas Ramirez, which is the oldest canned food manufacturer, and Cimpor, which is an international top 10 producer of cement.
Booming industry
On the somewhat ‘sexier’ side of things, meanwhile, Portugal is also making a name for itself in the renewable energy sector. Its location on the south west tip of Europe means it is exposed to winds coming across the Atlantic, which has led to the creation of a booming wind power industry. Here EDP Renovaveis is recognised as a true global leader.
In addition, the country has a thriving wine industry. It produces more than 70% of the cork used around the world, and the company Amorim is widely recognised as a global leader in cork production. The Douro Valley, meanwhile, is the only region on earth that produces port - as well as a range of increasingly popular wines.
Otherwise, most of Portugal’s economic activity takes place in Lisbon, which in 2015 was crowned ‘Entrepreneurial Region of the Year’ by the EU’s Committee of Regions. Unsurprisingly, there is a large and burgeoning start-up scene in the capital, which drives a considerable amount of activity.
But it is also home to lots of places of cultural and historical interest to help business travellers and/or foreign workers fill their spare time. Coastal destinations such as the Algarve are also popular, attracting more than four million visitors per year, while the island of Madeira has become famous lately for being the home of footballer Cristiano Ronaldo - plus a truly terrifying statue of him.
As for the country’s labour pool, its small population of 10.3 million and high levels of emigration mean that there are often opportunities for ex-pats wanting to work there.
But the Portuguese tax system can be challenging to navigate for those unfamiliar with it and who do not speak the language. Unless you have fluent Portuguese speakers on site, it may be worth partnering with a specialist organisation to help out locally, not least because the country has committed to adhere to the Common Reporting Standard, which means it now automatically exchanges tax information with most other major world nations. It also holds double taxation treaties with a good range of countries.
While it still remains to be seen where the Portuguese economy will go over the next few years, all the signs suggest that things are on the up. Despite widespread criticism when anti-austerity advocate and socialist Prime Minister, Antonio Costa, was appointed, he has managed to confound expectations and helped to make Portugal into one of the most attractive countries to work in across Europe.
Michelle Reilly has almost 20 years’ experience in contractor management. She joined CXC in 2009 to set-up its global Europe, Middle East and Africa business, and last year led a management buyout of the recruitment agency side of the organisation. Michelle is now chief executive of 6CATS International, which provides compliant contractor management solutions.
After suffering a deep and painful recession following the Eurozone debt crisis, the Portugese economy is now experiencing a major turnaround. Quarter-on-quarter growth for the third quarter of 2017 was 0.5%, up from 0.3% the previous quarter, driven by higher consumer confidence and increased consumption, healthy export levels and an ongoing recovery in the labour market.
A critical turning point in the country’s recovery from a situation that almost brought it to the brink of defaulting on its loans five years ago came in September when Standard & Poor’s upgraded the nation’s credit rating by one notch, taking it from junk (BB+) to the lowest investment status (BBB-) thanks to a more stable outlook. Fitch followed suit in December, upgrading its rating by two notches to BBB.
Growth is also expected to continue over the year ahead, although it is predicted to slow to 2.2% in 2018 from 2.6% the previous year as export levels start to fall.
Interestingly though, half of the so-called ‘New World’ once belonged to Portugal, which is why Portuguese happens to be the native tongue of countries as diverse as Brazil, Mozambique and Angola. The language is also spoken in Goa in East India, Macao and East Timor, showing just how far the country’s influence once spread.
While Portugal does not have quite the same international reach as it once did, it still plays its part in the global economy as a member of the European Union (EU). In fact, for a relatively small nation, it would be fair to say that it punches well above its weight in global markets and boasts some of the biggest firms around, albeit in less than glamorous industries.
As a result, the country is home to leading paper and pulp manufacturer, Portucel Soporcel, and Sonae Industria, the largest producer of wood panelling in the world. It also boasts Conservas Ramirez, which is the oldest canned food manufacturer, and Cimpor, which is an international top 10 producer of cement.
Booming industry
On the somewhat ‘sexier’ side of things, meanwhile, Portugal is also making a name for itself in the renewable energy sector. Its location on the south west tip of Europe means it is exposed to winds coming across the Atlantic, which has led to the creation of a booming wind power industry. Here EDP Renovaveis is recognised as a true global leader.
In addition, the country has a thriving wine industry. It produces more than 70% of the cork used around the world, and the company Amorim is widely recognised as a global leader in cork production. The Douro Valley, meanwhile, is the only region on earth that produces port - as well as a range of increasingly popular wines.
Otherwise, most of Portugal’s economic activity takes place in Lisbon, which in 2015 was crowned ‘Entrepreneurial Region of the Year’ by the EU’s Committee of Regions. Unsurprisingly, there is a large and burgeoning start-up scene in the capital, which drives a considerable amount of activity.
But it is also home to lots of places of cultural and historical interest to help business travellers and/or foreign workers fill their spare time. Coastal destinations such as the Algarve are also popular, attracting more than four million visitors per year, while the island of Madeira has become famous lately for being the home of footballer Cristiano Ronaldo - plus a truly terrifying statue of him.
As for the country’s labour pool, its small population of 10.3 million and high levels of emigration mean that there are often opportunities for ex-pats wanting to work there.
But the Portuguese tax system can be challenging to navigate for those unfamiliar with it and who do not speak the language. Unless you have fluent Portuguese speakers on site, it may be worth partnering with a specialist organisation to help out locally, not least because the country has committed to adhere to the Common Reporting Standard, which means it now automatically exchanges tax information with most other major world nations. It also holds double taxation treaties with a good range of countries.
While it still remains to be seen where the Portuguese economy will go over the next few years, all the signs suggest that things are on the up. Despite widespread criticism when anti-austerity advocate and socialist Prime Minister, Antonio Costa, was appointed, he has managed to confound expectations and helped to make Portugal into one of the most attractive countries to work in across Europe.
Michelle Reilly has almost 20 years’ experience in contractor management. She joined CXC in 2009 to set-up its global Europe, Middle East and Africa business, and last year led a management buyout of the recruitment agency side of the organisation. Michelle is now chief executive of 6CATS International, which provides compliant contractor management solutions.
