Portugal Country Guide 3

Portugal Country Guide Part 3


Macroeconomic developments

The evolution of the economic situation in Portugal has been marked, in the last decade, by the integration in the European Union and by the implementation of a wide range of structural reforms. In this period, the Portuguese economy showed an overall positive performance, benefiting from a favorable European environment, having experienced a phase of expansion that lasted from 1985 to 1991 (average annual growth rate of 4.4%), a year in which demand started to slow down. The rapid growth of the product was associated with an intensification of the degree of openness to the outside of the Portuguese economy. A prominent role was also played by public investment, mainly aimed at building infrastructure, and private projects that benefited from support from community funds.

The decline of the primary sector, diffuse industrialization and the rapid deepening of tertiary sectors.

The changes that took place in the Portuguese economy had very different origins and impacts from the sectoral point of view. In particular, there has been a significant reduction in the weight of the primary sector in total employment and GDP; a reduction also in the weight of the industry, although the significance of the export sector of the industry has increased, with emphasis on the automobile sector; to a rapid deepening of the tertiary sector, with emphasis on the increase in the shares of production support services (banks, insurance and services provided to companies) and hotels in the total GDP. This set of transformations was associated with the strengthening of rural depopulation and the continuation of the trend towards the coastalization of economic activities. About 80% of the manufacturing industry is located in territories between the Cávado River, to the north, and the Setúbal peninsula, to the south, where forms of diffuse industrialization have developed which are reflected in the structuring of the urban network and hamper the proper ordering of infrastructure, equipment and services. The observed evolution did not, in addition, allow us to overcome many of the structural problems of the Portuguese economy. National specialization remains linked to mature sectors (particularly textiles and wood) and is also supported, in traditional sectors, in low labor costs, characteristics that in a context of rapid liberalization of international trade leave Portugal in a somewhat position weakened, given the competitive capacity of emerging economies.

Living conditions and consumption levels

Consumption is an economic, social and cultural phenomenon that has assumed an increasing significance in Portuguese society, following the evolution registered in the other countries of the community. This has contributed to the increase in the average level of family income, technological progress and the change in habits and mentalities. In the regional context, there is a significant departure from the region of Lisbon and the Tagus Valley in relation to the national standard, with emphasis on both the lower weight of consumption of food products, beverages and tobacco (30%) and the greater weight of associated consumption transport and communications (18%), education, culture and distractions (5%) and the acquisition of other goods and services (15%). With regard to the remaining regions, it should be noted that the North region presents a very different behavior from Lisbon and the Tagus Valley; the Centro region is the one that best summarizes the national standard; the region of Alentejo is also one of those that presents significant deviations from the national average, and it is worth noting the great importance of the consumption of food products, beverages and tobacco, clothing and footwear and domestic equipment; the region of the Algarve is the one that most closely resembles the pattern of the region of Lisbon and the Tagus Valley. It can be concluded that regional variations in the structure of family consumption are rooted not only in spatial asymmetries in the distribution of income, but also in social and cultural differences.


According to loverists, during the 1950s, Portugal strengthened its relations with the United States and in 1958 Salazar allowed an opposition candidate, Humberto Delgado, to run for president, but this would be won by the government’s candidate, Rear Admiral Américo Deus Thomaz, who he was re-elected in 1965 and 1971.

In the 1960s, Portugal had to face several revolts in its overseas territories; India annexed Goa in 1961 and in Africa several rebellions broke out: in Angola in the beginning of 1961, in Guinea in the end of 1962 and in Mozambique in the fall of 1964. The government’s response was to organize repressive military campaigns against these African uprisings, at the same time. time that it took steps to improve political and economic conditions in those territories. As a result of this policy, in 1961 Portugal extended Portuguese citizenship to the inhabitants of its African colonies, but the fierce clashes continued throughout the decade and the following. During this period, the United Nations condemned Portugal for maintaining colonial wars (see Colonialism).

In the mid-1970s, several foreign loans helped to develop several irrigation projects and construction of public works. Although there were several student demonstrations during this period, political opposition to the Salazar regime was not organized.

Portugal Country Guide 3

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