After a prolonged recession, the Portuguese economy started to recover in 2013. Recently, economic growth has been driven by accelerating private consumption and investment. Domestic demand is continuing to recover, with imports growing faster than exports. Economic expansion is expected to accelerate slightly in the medium term as a result of gradually improving financing conditions and external demand. The labour market situation has been improving since the spring of 2013 and the unemployment rate has stabilised since October 2014. Inflation is projected to rise moderately in the medium term. Portugal is still affected by very high private and government debt.
Portugal is experiencing excessive macroeconomic imbalances, which require decisive policy action and specific monitoring. Portugal exited the economic adjustment programme in 2014 and is currently subject to post-programme surveillance and European Semester surveillance, with the Commission opening a Macroeconomic Imbalances Procedure for Portugal in February 2015. Despite considerable progress achieved during the programme, both as regards economic adjustment and policies, important risks remain linked to the high levels of indebtedness, both internally and externally, and across various sectors and deserve close attention. There are also strong deleveraging pressures in the context of low growth, low inflation and high unemployment.
Read a complete analysis of Portugal's economy in the country report 2015 [709 KB]
The Commission has made eight country-specific recommendations to Portugal to help it improve its economic performance, which have been approved by all EU member states. These are in the areas of: public finances; fiscal structural reforms; labour market and social inclusion; education and training; financial sector; network industries; administrative burden; evaluation of reforms.