According to The New York Times, Portugal, along with Greece and Spain, has been growing significantly faster than the traditional economic powerhouses of the Eurozone, like Germany. In 2023, these countries grew more than twice as fast as the eurozone average.
"In Portugal, where growth has been driven by construction and hospitality, the economy expanded 1.4 percent in the first quarter [of 2024] when measured against the same quarter last year", the NY Times reporters stated.
According to this article, Portugal has benefited from a strong recovery in tourism, generating record revenues after pandemic restrictions were lifted. It has also been successful in attracting international investors.
Following the Eurozone debt crisis and subsequent austerity measures, Portugal implemented structural reforms to attract investment and revive growth. The country cut corporate taxes, simplified regulations to stimulate business, and made labour markets more flexible.
Portugal has been strengthened by the European Union's pandemic recovery funds, which it has used to invest in renewable energy, digitalization, and other key areas.
The article also states that while the economic outlook is positive, challenges remain. High-interest rates have slowed growth, and Portugal still carries significant debt burdens. These economic gains require ongoing reforms to boost competitiveness and productivity, while unemployment and wage growth must be carefully managed.
