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Lisbon: domestic consumption is
up, FDI is down |
The headline figures suggest that Portugal's economy is in
great shape. GDP grew by at least 3% last year and is set to
continue on track through 2001. Unemployment is low by European
standards at 4% across the board.
Government borrowing requirements are steadily falling, and the
deficit is expected to end up at around 1.5% of GDP. Moreover, the
Portuguese economy should be more resilient than most to the US
slowdown. More than 80% of exports go to other EU countries and
only 5% to the US.
That is the good news. Less auspicious is the fact that Portugal
is saddled with structural imbalances. Most serious in the short to
medium term is the external deficit, now around 10% of GDP and
expected to worsen to about 11% this year and 12% in 2002. Excess
demand, clearly reflected in a trade deficit running...
