segunda-feira, 17 de fevereiro de 2014
Portugal the surprise hero of eurozone growth as exports and tourism prosper
February 16, 2014 4:40 pm
By Peter Wise in Lisbon / Financial Times
Tearful farewells have become a common sight at Lisbon’s Portela airport. Three years of punishing austerity and deep recession have triggered an exodus where an estimated 200 young graduates and other emigrants leave each day.
But nearby, the airport’s busy cargo terminals and bustling shopping malls reveal a less familiar aspect of the painful economic adjustment Portugal is making as part of a €78bn international bailout agreement: record levels of export growth and tourism have helped make the country the surprise hero of the eurozone recovery.
Year-on-year growth of 1.6 per cent in the final quarter of 2013 outstripped every other eurozone member, including Germany, while quarterly growth of 0.5 per cent, topped only by the Netherlands, shattered economists’ forecasts of only a 0.1 per cent increase.
Describing Portugal as the “eurozone’s new growth star”, Christian Schulz, a senior economist with Berenberg, says the EU’s sovereign debt crisis has been the “handmaid of change”, forcing peripheral member states such as Portugal to make “sweeping structural reforms” and improve their export competitiveness.
“Portugal, not Spain, is the biggest positive surprise in the [eurozone] periphery,” according to Ralph Solveen, an economist with Commerzbank. “Unlike in Spain, the unemployment rate has already come down significantly and employment has increased since the spring.”
The national statistics office noted worrying signs that domestic demand was contributing positively to growth in the last quarter for the first time since 2010. This may reflect the impact of previous cuts in public sector pay and pensions that were subsequently overturned by Portugal’s constitutional court. An over-reliance on the domestic market has been seen as one of Portugal’s structural weaknesses but exports are now driving the turnround.
Export growth of 24.2 per cent over the four years to December and a 5.1 per cent contraction in imports have delivered Portugal’s first current account surplus in two decades. Exports now account for 41 per cent of national output, compared with 28 per cent in 2008.
Shoemakers, for example, who use Portela to ship individual pairs to top customers, including British royalty and celebrities such as David Beckham and Madonna, lincreased exports 8 per cent last year, notching up record overseas sales of more than €1.7bn. Over the past fours the sector has expanded 28 per cent, with 1,700 companies exporting 98 per cent of their production.
Once an industry competing on low wages and low prices, Portugal’s footwear companies have transformed themselves by investing in design, technology and branding. In the world of shoes, “Made in Portugal” is now second only to “Made in Italy” in terms of international prestige and the factory prices they command, says Jorge Correia, founder of Helsar, a Porto-based footwear company.
Portugal is also attracting more overseas visitors. In July last year, in the depths of the country’s harshest recession for 40 years, a chic new commercial area with 20 shops was opened at Portela airport to cater to the growing influx of visitors. Record tourism revenue in 2013 is estimated at more than €9bn, accounting for almost 14 per cent of total exports.
Carlos Moedas, the minister responsible for co-ordinating the adjustment programme, says the ruling centre-right coalition has enacted more than 400 measures aimed at boosting productivity and making it easier for companies to do business. Reforms range from trying to open protected sectors such as electricity, telecommunications and pharmaceuticals to speeding up civil court proceedings.
The focus has been on the labour market where severance payments have been cut, dismissals made easier, the working year increased by seven days, the duration of unemployment benefits reduced and the reach of collective bargaining agreements curtailed. The average annual wage fell from €16,760 in 2010 to €16,047 in 2012.
Increased competitiveness has helped Portugal boost export market shares, both inside the EU, where it sells 60 per cent of its products, and in developing markets, particularly Brazil, Russia and the countries of Africa. At the same time, higher-value industries including electronics, mechanical engineering and automobiles are gaining weight in the economy over traditional sectors clothing and food products.
Despite positive signs that the economy will emerge this year from three consecutive years of recession, with growth forecast at 0.8 per cent or more, many Portuguese see little prospect of any immediate relief from their hardships.
When it formally ends in June, the arduous adjustment programme will have left behind a trail of devastation: tens of thousands of small business have fallen by the wayside, pay and pensions have been squeezed, inequalities have been aggravated and lives blighted by long-term unemployment.
If and when they return, the young emigrants saying goodbye at Portela airport today may be the best judges of whether the changes achieved have been worth the price.