Highlights: On Sunday March 10, the Portuguese are called to the polls to elect their deputies. Early elections were called in early November, after the resignation of socialist Prime Minister Antonio Costa. Portugal has become the good student of the European Union, believes Bruno de Moura Fernandes, macroeconomics manager at the credit insurance specialist Coface. But there remains a problem: with the massive arrival of retirees, investors and digital nomads, Portugal has seen housing prices explode. Young Portuguese workers are the main victims of this surge.

On Sunday March 10, the Portuguese are called to the polls to elect their deputies. Early elections were called in early November, after the resignation of socialist Prime Minister Antonio...

Early elections in Portugal: who benefits from the good health of the economy?

On Sunday March 10, the Portuguese are called to the polls to elect their deputies.

The early elections were called in early November, after the resignation of Socialist Prime Minister Antonio Costa, implicated in a corruption scandal.

For eight years in power, the socialists have praised their economic record.

But do all Portuguese people benefit from it?

Social Democratic Party (PSD) and Democratic Alliance (AD) leader Luis Montenegro addresses the crowd during a rally on the last day of campaigning ahead of snap elections in Lisbon, Portugal, March 8, 2024. © Pedro Nunes / Reuters

By: Agnieszka Kumor

The year 2011,

the Portuguese

still remember it.

At the time, their country was hitting rock bottom.

Public debt

is exploding.

The markets doubt that Portugal would one day be able to repay its loans.

Exhausted by what was then called "

the debt crisis in the euro zone

the small country in southern Europe found itself on the verge of bankruptcy.

Saved

at the last minute

thanks to an agreement signed with the European Union and the International Monetary Fund, Lisbon obtained financial aid amounting to 78 billion euros.

But in return, the country undertakes to implement structural reforms and draconian budget cuts.

More robust economic growth than in the rest of the euro zone

Today, after more than ten years of sacrifices, Portugal has become the good student of the European Union, believes Bruno de Moura Fernandes, macroeconomics manager at the credit insurance specialist Coface.

“

The unemployment rate has fallen.
It is currently at 6.6%.
We also have a public debt, which has decreased enormously.
Public accounts have been cleaned up, sometimes with tax surpluses.
Portuguese growth has been dynamic.
Last year, the country's GDP increased by 2.3%.
And on the markets, Portugal pays less than Spain to finance its public debt

,” he explains.

The country little exposed to Russian gas

If the country is more resistant to the consequences of the war in Ukraine, it is because it is less dependent on Russian gas.

Paradoxically, his isolation turned out to be saving for him.

“

The Iberian Peninsula is very poorly connected in terms of gas network to the rest of Europe.
There are only a few weak connections between France and Spain.
This made it possible to put in place exceptional mechanisms.
The Portuguese government has implemented a cap on gas prices.
In Portugal and Spain, gas prices, and therefore

ultimately

electricity, have remained limited compared to the rest of the European Union

”

recalls Bruno de Moura Fernandes.

A shadow on the picture

Portugal has been able to take advantage of the tourist boom to develop its economic model.

Machine tools and agriculture remain its flagship sectors.

Portugal is notably the largest producer of cork in the world.

At the same time, the small country is increasingly focused on services, digital technology and green energy.

However, there remains a problem: with

the massive arrival of retirees

, investors and digital nomads, Portugal has seen housing prices explode.

“

Property prices have risen by 10% per year on average over the past four years.
It is enormous

notes the Coface expert.

Young Portuguese workers are the main victims of this surge.

Their mobilization for this vote will be decisive.

Also listen: Legislative elections in Portugal D-2: right and left neck and neck, breakthrough of the far right

Early elections in Portugal: who benefits from the good health of the economy?

Early elections in Portugal: who benefits from the good health of the economy?

More robust economic growth than in the rest of the euro zone

The country little exposed to Russian gas

A shadow on the picture

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