Portugal details - Export & Investment

aicep Portugal Global
Portugal - Basic Data (March 2011)

Index

1. Background 3

1.1 Geography 3

1.2 Population and language 3

1.3 Summary 3

2. Politics 4

3. Infrastructures 4

4. Economy 4

4.1 Economic structure 4

4.2 Current economic situation and outlook 5

5. International trade 6

6. International investment 8

6.1 Foreign direct investment in Portugal 8

6.2 Portuguese foreign direct investment 9

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Background The coast of mainland Portugal is mostly unbroken, except for
two major estuaries (Tagus and Sado). There are also small bays
(Peniche, Sines and Lagos) and lagoons (Vouga-Aveiro, Óbidos
Mainland Portugal is geographically located in Europe’s West
and Faro). Headlands are few in number, small in size but of great
Coast, on the Iberian Peninsula. It is bordered by Spain to the
beauty: these include the Capes of Mondego, Carvoeiro, Roca,
North and East and by the Atlantic Ocean to the West and South,
Espichel, Sines, S. Vicente and Santa Maria.
making it a privileged geo strategic location between Europe,
America and Africa.
Portugal’s agreeable climate offers mild winters and pleasant
In addition to the mainland, Portugal’s territory also includes
summers. The wettest months are November and December,
the Autonomous Regions of the Azores and Madeira, two
whilst the driest are from April to September.
archipelagos located in the Atlantic Ocean.
Portuguese borders have remained unchanged since the XIII
Century, making Portugal one of the oldest countries in the Population and language
world, with nearly 900 years of history that clearly demonstrates
its strong identity and internal cohesion. Portugal’s population is estimated at 10.6 million people, of
which more than half are economically active. The demographic

Geography concentration is higher near the coastal areas, with Lisbon (the
capital city) and Porto showing the highest population density.

On mainland Portugal, the Tagus River, Portugal’s largest river,
divides the high mountainous lands and plateaus of the North, The Portuguese language is spoken by more than 200 million

from the low lying plains of the South. Also the flat coastal area people spread over all continents: Europe, Africa, America and

contrasts with that of the inland. The highest peaks are found in Asia. This diversity greatly contributes to the strong historical and

a mountainous range in the centre of the country, of which Serra cultural ties that Portugal has with the world.

da Estrela is the highest with 1,991 m. On the archipelagos, Pico
(2,351 m) is the highest peak in the Azores, while Pico Ruivo
(1,862 m) is the highest peak in Madeira. Summary

Area: 92,207.4a sq km

Population (thousands): 10,636 (2010)

Working population
5,581 (2010)
(thousands):

Population density
115.4 (2010)
(inhabit./sq km):

Official designation: Republic of Portugal

Capital: Lisbon (2.1 million inhabit.– metropolitan area)

Aveiro, Beja, Braga, Bragança, Castelo Branco,
Coimbra, Évora, Faro, Funchal (in Madeira),
District Capitals: Guarda, Leiria, Ponta Delgada (in the Azores),
Portalegre, Porto, Santarém, Setúbal, Viana do
Castelo, Vila Real and Viseu.

Main religion: Roman Catholic

Language: Portuguese

Currency: Euro (in units of 100 cents)

EUR = 200.482 PTE (fixed parity 1/01/99)

EUR = 1.3257 USD (average rate in 2010)

GDP at market prices: 172,837 million EUR (2010)

GDP per capita: 16,300 EUR (2010)

Source: INE - Instituto Nacional de Estatística; Banco de Portugal
Note: (a) INE – Portuguese Statistical Yearbook 2010



Politics Maritime Routes: Mainland Portugal has nine major ports: Viana
do Castelo and Leixões, in the North; Aveiro and Figueira da Foz,
The Republic of Portugal is a Parliamentary democracy, based in the Centre; Lisbon and Setúbal in the Lisbon region; Sines in
on the respect and the effective guarantees for fundamental the Alentejo; Faro and Portimão in the Algarve. The Autonomous
rights and freedoms and the separation and interdependence of Region of the Azores has five ports and the Autonomous Region
powers. Under the Portuguese Constitution, sovereign powers of Madeira has three. Only Lisbon and Leixões on the mainland
are vested in the President of the Republic, the Assembly of the offer passenger services, though the number of passengers
Republic, the Government and the Courts. embarking and disembarking at Leixões port is insignificant. The
port infrastructure is thus primarily geared to handling goods.
The President of the Republic is the Head of State, elected by This is particularly so at Sines (39.3% of total in 2010), Leixões
direct universal suffrage for a five year term, with a maximum of (22.4%) and Lisbon (18.5%).
two terms. The current President of the Republic is Aníbal Cavaco
Silva who was re-elected on 23rd January 2011. Economy

Legislative power lies with the Parliament (Assembly of the Economic structure
Republic) represented by 230 members which are elected by
popular vote to serve a four year term. Following the trend of its European partners, over the last decades
Executive power lies with the Government, headed by the Prime one of the most important characteristics of the structure of the
Minister, the Ministers and the Secretaries of State. José Socrates, Portuguese economy is the increase in the services sector. In 2010,
Portugal’s Prime Minister and the leader of the Socialist Party agriculture, forestry and fishing generated only 2.7% of GVA
won the legislative elections in 2009. (compared with 24% in 1960), and 10.9% of employment, while
industry, construction, energy and water represented 22.8% of GVA
The Portuguese judicial system consists of several categories of and 27.7% of employment. The services sector generated 74.5% of
Court, independent of each other, with their own structure and GVA and represented 61.4% of the labour force.
rules. Two of these categories are composed only by one Court
(the Constitutional Court and the Court of Auditors). The Judicial, Apart from a greater focus on services, there has also been significant
Administrative and Fiscal Courts are numerous, hierarchically change in manufacturing, which has undergone a modernization
structured and respond to a Supreme Court. In addition, there are process. Traditional manufacturing has been gradually replaced by
Maritime Courts, Courts of Arbitration and Justices of the Peace. new activity sectors that offer a larger incorporation of technology
and that have contributed to the growth of the Portuguese economy,
Infrastructures namely motor vehicles and parts thereof, electronics, energy,
pharmaceutical and the new technologies.
Road Infrastructures: Portugal has one of the most developed
Portugal’s geographic position also impacts on the growth of the
road networks in Europe, comprising of motorways (AE), main roads
services sector. The mild Mediterranean climate regulated by the
(IP), secondary roads (IC), national roads (EN) and municipal routes.
influence of the Atlantic, together with its extensive coastline, are
In 2009, the mainland road network reached 13,112 km, of which
significant factors driving the growth of the tourism industry.
2,705 km was motorway, more than 1/5 of the total road network.

GVA Breakdown – 2010
Rail Network: The rail network comprises 3,600 km (2,842 km
2.7%
with rail traffic) providing North-South connection down the
coastline and East-West across the country. Railway network 22.8%
density tends to be more significant in regions with a higher
population concentration.

Airports: There are 14 airports. On the mainland the three major
international airports are located in the coastal cities of Lisbon,
Porto and Faro. A new airport is to be built in the Lisbon region. 74.5%
Due to the isolation of the Autonomous Regions there are a
larger number of airports. The Azores have nine and Madeira has Services Industry, construction, Agriculture, forestry,
energy and water and fishing
two. Most international airlines serve the country’s main airports.
The Portuguese airline is TAP Portugal. Source: INE – Instituto Nacional de Estatística Note: GVA - Gross Value-Added



initiated the rise allowing progress towards a more sustainable
Employment Breakdown - 2010
economy; Portugal was seriously affected by the international
10.9% crisis, that strongly influenced the country’s economic activity
performance since 2008, culminating with the contraction of
2.6% of GDP in 2009.
However, the gradual improvement of demand on a global scale
and of the economy of our main trade partners, which started at
27.7%
the end of 2009, allowed Portugal to retake a growth trajectory
61.4%
in 2010 (GDP rose 1.4% during the same period). The main
reason for that recovery was the performance of our exports.
In an uncertain financial market and with the negative effects of
Services Industry, construction, Agriculture, forestry
energy and water and fishing the risk of national debt default in accessing finance, the evolution
Source: INE – Instituto Nacional de Estatistica of the Portuguese economy continues to be determined by the
necessity of budget consolidation and by the strengthening of
Current economic situation and outlook the process of adjustment of the macroeconomic imbalance,
with repercussions in the economic growth and employment.
After significant progress in the modernization of the economy
over the last years, in conjunction with the implementation of The forecast indicates a new constraint in the economy for 2011
consolidating budget measures and structural reforms which and a moderate improvement in 2012.

Economic Indicators 2006 2007 2008 2009 2010 2011a 2012a

GDP at market prices Million EUR 160,273 168,737 172,022 168,074 172,837 174,100 175,400

Million USD 201,944 231,170 252,872 233,623 229,873 217,625 210,480

Real change 1.4 2.4 0.0 -2.5 1.4 -1.4 0.3

Per capita Euro 15,143 15,906 16,194 15,805 16,300 16,350 16,437

USD 19,080 21,791 23,805 21,969 20,438 19,724 19,720

Per person employed Nominal change 3.5 5.1 1.4 0.5 4.4 2.3 0.7

Private consumption Million EUR 104,746 110,635 115,704 111,949 116,033 116,400 117,200

Real change 1.8 2.5 1.8 -1.0 2.0 -1.9 -1.0

Public consumption Million EUR 32,421 32,999 33,961 35,826 37,207 36,400 36,000

Real change -0.6 2.0 -0.5 -14.0 3.2 -6.6 -1.0

Investment/GFCF Million EUR 35,890 37,629 38,151 32,756 32,056 32,300 32,800

% of GDP 22.4 22.3 22.2 19.5 18.5 18.6 18.7

Real change -1.3 2.6 -1.8 -11.6 -4.8 -5.6 -1.3

GFCF (excl, construction) % of GDP 8.5 8.7 8.8 7.7 7.2 n.a. n.a.

Real change 4.6 7.6 4.3 -11.6 -3.6 n.a. n.a.

Population (b) ‘000 inhabitants 10,599 10,618 10,627 10,638 10,636 10,667 10,684

Employment (b) ‘000 individuals 5,160 5,170 5,198 5,054 4,978 4,900 4,900

Unemployment (b) ‘000 individuals 428 449 427 529 603 600 700

Rate of economic activity (b) % of total pop. > 15 years old 62.5 62.6 62.5 61.9 61.9 n.a. n.a.

Unemployment rate Portugal (c) % of active population 7.7 8.0 7.6 9.5 10.8 11.1 11.2

Unemployment rate EU-27 (d) % of active population 8.2 7.2 7.0 8.9 9.6 9.5 9.1

Overall balance - General Government % of GDP -4.1 -2.8 -2.9 -9.3 -7.3 -7.4 -6.5

Public Debt % of GDP 64.7 62.7 65.3 76.1 82.8 88.8 92.4

Current Account Balance Million EUR -17,187 -17,074 -21,699 -18,362 -17,060 -13,928 -11,752

% of GDP -10.7 -10.1 -12.6 -10.9 -9.9 -8.0 -6.7

HCPI – Portugal Annual change – average 3.0 2.4 2.7 -0.9 1.4 3.6 2.0

HCPI – EU-27(d) Annual change - average 2.3 2.4 3.7 1.0 2.0 2.5 1.8

Sources: GEE – Gabinete de Estratégia e Estudos based on INE – Instituto Nacional de Estatística, and Banco de Portugal, except where stated in contrary
Notes: (a) Forecast: Eurostat; European Commission; Banco de Portugal; EIU - Economist Intelligence Unit (b) INE – Employment Statistics; EIU (c) INE; European Commission
(d) Eurostat; European Commission Exchange rate EUR/USD – Banco de Portugal and EIU n.a. – not available



International trade The largest positive growth rate in value is in exports to Spain,
Germany, France and the USA, that together represented a

After the loss verified in 2009, in 2010 there was a significant 50% increase of the total registered in 2010.

increase in Portuguese exports. Portugal benefited from an
increase in international demand and from the economic In terms of traded products, in general there was an increase

recovery of our main trade partners, which started at the end of in 2010, in relation to the previous year, but the major

2009, and was consolidated during 2010. contribution to the positive evolution of exports of goods was
determined by Fuels to non-EU countries; Vehicles and other

These factors were the reasons for an increase in exports of transport equipment, Pulp and paper, Plastics and rubber to the

goods and services, with a greater emphasis on goods (15.7%) EU countries.

than on services (7.7%).
A larger internal demand contributed to the increase of imports
In 2010, Portugal’s export markets for goods, continued to grow and a slight deterioration in the trade balance. As with exports,
towards a broader diversification of trade partners (during the Fuels and Vehicles and other transport equipment, were the
last decade, EU countries have lost market share in favour of group of products that mostly contributed to the increase of
third countries, which already accounted for ¼ of total exports). imports in 2010.

Change %
Portugal’s International Trade 2005 2006 2007 2008 2009 2010
(10/09)

Trade in goods and services1
Exports (fob) Million EUR 43,375 50,495 55,486 57,066 48,339 54,470 12.7

Imports (fob) Million EUR 57,689 63,883 68,159 73,449 60,148 65,692 9.2

Balance (fob) Million EUR -14,314 -13,388 -12,673 -16,383 -11,809 -11,222 -5.0

% of GDP -9.3 -8.4 -7.5 -9.5 -7.0 -6.5

Trade in goods2
Exports (fob) Million EUR 31,137 35,640 38,309 38,950 31,768 36,769 15.7

Imports (cif) Million EUR 51,379 56,295 59,927 64,194 51,368 56,783 10.5

Balance (fob-cif) Million EUR -20,242 -20,654 -21,617 -25,244 -19,600 -20,014 2.1

% of GDP -12.4 -12.0 -11.9 -14.0 -11.7 -11.6

Sources: (1) Banco de Portugal (Balance of Payments)
(2) INE – Instituto Nacional de Estatística (initial data)

Geographical Distribution - Exports - 2010 Geographical Distribution - Imports - 2010

1.7% 10.6%
16.3%
1.9%
1.1%
5.2%
2,2%
2.2%
6.6% 2.6%

74.0% 75.6%

UE 27 NAFTA Mercosul (b) UE 27 NAFTA PALOP

PALOP MAGHREB (a) Other Mercosul (a) MAGHREB (b) Other

Source: INE – Instituto Nacional de Estatística (initial data) Source: INE – Instituto Nacional de Estatística (initial data)
Note: (a) Includes: Morocco, Algeria, Tunisia, Libya and Mauritania (b) Includes associate members Note: (a) Includes associate members (b) Includes: Morocco, Algeria, Tunisia, Libya and Mauritania



Trading Partners – Main Clients - 2010 Trading Partners – Main Suppliers - 2010

22.6% 31.1%
26.6% 23.3%

1.2%
2.9% 1.8%
2.4%
3.6% 2.8%
3.8% 2.8%
3.8%
3.8%
13.0% 5.2%
5.2%
5.7% 13.9%
5.5%
11.8% 7.2%

Spain Angola Belgium Spain Netherlands Nigeria
Germany Netherlands Brazil Germany UK Brazil
France Italy Others France Belgium Others
UK USA Italy China

Source: INE – Instituto Nacional de Estatística (initial data) Source: INE – Instituto Nacional de Estatística (initial data)

Exports – Main Products

0
14,9%
Machinery and tools 16,2%
Vehicles and other transport material 12,4%
11,7%
Base metals 8,0%
7,8%
Plastics and rubber 6,9%
6,4%
Oil products 6,8%
5,0%
6,0%
Clothing 6,8%
Wood Pulp and paper 5,7%
4,7%
Other products 5,6%
6,0%
5,5%
Minerals and mineral products 5,6%
5,4%
Agricultural Products 5,5%
Food Products 5,2%
6,1%
Chemical Products 5,0%
4,9%
4,1%
Textile materials 4,3%
Footwear 3,6%
4,0%
Wood and cork 3,5%
3,7%
Optical and precision instruments 1,1%
1,1%
Skins and leather 0,3%
0,3%
2010 2009

Imports – Main Products
0
16,3%
Machinery and tools 19,2%
Oil products 14,7%
12,6%
Vehicles and other transport material 14,1%
12,2%
10,0%
Chemical Products 10,2%
9,5%
Agricultural Products 10,0%
Base metals 7,9%
7,7%
Plastics and rubber 5,1%
4,9%
4,1%
Food Products 4,5%
3,3%
Other products 3,4%
3,0%
Clothing 3,1%
Textile materials 2,8%
2,7%
2,3%
Wood Pulp and paper 2,5%
Optical and precision instruments 2,2%
2,3%
1,4%
Minerals and mineral products 1,6%
Wood and cork 1,2%
1,1%
Skins and leather 1,0%
1,0%
Footwear 0,9%
2010 2009
0,9%

Source: INE – Instituto Nacional de Estatística (initial data)



International investment crisis, not only on the economy of the countries that traditionally
invest overseas, but also of the main recipients, forcing them to
Foreign direct investment in Portugal rethink their strategies and their external ranking.

Since 2000, FDI in Portugal has shown a steady growth, with
By activity sector, in 2010, Wholesale and Retail Trade,
gross investment ranging between 20 and 35 billion EUR and
Manufacturing Industry and Financial and Insurance Activities were
which has been directed towards the innovative and technological
the sectors that most benefited from foreign capital in Portugal,
based industries that have international markets as clients.
representing, in total, around 82% of the total gross FDI.

In 2010, FDI into Portugal reached a gross value of 35 billion The EU countries remain the main investors in Portugal (86.6%

Euros, which represented an increase of 9.6% in relation to the in 2010), with Germany, France, United Kingdom and Spain

previous year. In net terms the reduction was significant reaching occupying the leading positions in the ranking. Outside the EU27
43.7%. This unfavourable behaviour of net FDI results from a members, only Brazil and Switzerland appeared on the list of the
strong negative impact of the economic international financial top 10 foreign investors in Portugal.

Trends in Foreign Direct Investment in Portugal

35,287 35,099
32,820 32,634 32,018
27,677

8,695

3,160 2,238 3,185 1,948 1,097
2005 2006 2007 2008 2009 2010

Gross investment Net investment

Source: Banco de Portugal (February 2011) Unit: Million EUR

Foreign Direct Investment in Portugal Foreign Direct Investment in Portugal
per Sector - 2010a per Country of Origin - 2010a

1.0% 0.6% 1.8% 5.4%
1.2% 6.6% 2.4%
3.1% 5.2% 18.3%
39.3%
5.6%
5.5%

7.0%
18.2%

10.3% 16.7%

13.6% 13.8%
24.4%

Wholesale and retail trade Consultancy, scientific and
technical activities Germany Netherlands Belgium
Manufacturing
Real estate activities France Luxembourg Ireland
Financial and insurance
activities Construction UK Brazil Others
Information and Electricity, gas and water Spain Switzerland
communication activities Others

Source: Banco de Portugal (February 2011) Note: (a) Gross Investment Source: Banco de Portugal (February 2011) Note: (a) Gross Investment



Portuguese foreign direct investment In 2010, Portuguese companies invested mostly in the Financial
and Insurance Activities sector (59% of the total). The main

Over the last 10 years gross Portuguese direct investment abroad markets for those investments were Luxembourg, Spain,

(PFDI) was estimated at between 6 and 15 billion Euros. Netherlands and Brazil which, together, represented more than
60% of the total Portuguese FDI flow for that period.
The period from the late 90’s and the beginning of the present
decade was clearly marked by great outflows of Portuguese In recent years, there has been a broader diversification of
investment, mainly toward Spain and Brazil. destinations for Portuguese overseas investment, with EU-27
showing a reduction in total investment. Apart from Brazil, there
After an exceptionally positive year in 2007, the following three is an increase in interest for the PALOP’s (African Portuguese
years reflected a clear slow down of the Portuguese companies’ Speaking Countries), with particular emphasis on Angola, which
overseas projects, as a consequence of the environment of received 4% of total Portuguese FDI in 2010) and for Eastern
uncertainty generated by the international financial economic European countries, in particular Poland (an increase of 242% in
crisis, the gross transfers of overseas capital reached 5.8 billion 2010) and Romania (an increase of 30%), witch are part of the
Euros, the lowest amount since 2003. 10 top countries of destination of Portuguese FDI.

Trends in Portuguese Foreign Direct Investment

14,835

11,376
9,781 9,828
7,770
5,691 5,774
4,013
1,697 1,872
588

-6,500
2005 2006 2007 2008 2009 2010

Gross investment Net investment

Source: Banco de Portugal (February 2011) Unit: Million EUR

Portuguese Foreign Direct Investment Portuguese Foreign Direct Investment
per Sector - 2010a by Major Recipients - 2010a

0.7% 0.5%
5.8%
0.8%
19,7%
5.7% 22,0%

6.6%
1,5%
1,8%
8.6% 2,3%
3,2%

3,8%
59.3%
12.0% 3,9% 16,1%
11,3%
14,4%
Financial and insurance Manufacturing
activities
Electricity, gas and water Luxembourg Angola Romania
Consultancy, scientific and
technical activities Information and Spain Poland France
communication activities
Wholesale and retail trade Netherlands USA Others
Real estate operations
Construction Brazil UK
Others

Source: Banco de Portugal (February 2011) Note: (a) Gross Investment Source: Banco de Portugal (February 2011) Note: (a) Gross Investment


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