PORTUGAL

MAP

Age Structure
• 0-14 years: 16.2% (male 910,012/female 835,025) • 15-64 years: 65.8% (male 3,539,457/female 3,541,989) • 65 years and over: 18% (male 791,950/female 1,141,872) (2011 est.)

000 population (July 2012 est.86 deaths/1.) • country comparison to the world: 41 .) • country comparison to the world: 195 Death Rate: • 10.000 population (2012 est.181% (2012 est.) • country comparison to the world: 178 Birth Rate: • 9.Population Growth Rate • 0.76 births/1.

ECONOMY • Portugal has become a diversified and increasingly service-based economy since joining the European Community • Over the past two decades. but fell back in 2001-08.3% in 2010.5% in 2009. and contracted 2. before growing 1. • The economy had grown by more than the EU average for much of the 1990s. . successive governments have privatized many state-controlled firms and liberalized key areas of the economy • The country qualified for the Economic and Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU members.

.ECONOMY • GDP per capita stands at roughly two-thirds of the EU-27 average • A poor educational system and a rigid labor market have been obstacles to greater productivity and growth.

) -2.2% (2011 est.3% (2010 est.9 billion (2011 est.) country comparison to the world: 209 1.5% (2009 est.GDP • $241.) .) • GDP – Real Growth Rate: • • • • -2.

) • $23.700 (2010 est.200 (2011 est.) note: data are in 2011 US dollars .) country comparison to the world: 58 • $23.400 (2009 est.GDP – Per Capita (PPP) • $23.

) .GDP – Composition By Sector • agriculture: 2.8% • services: 74.5% • industry: 22.8% (2011 est.

8% (2009 est.) country comparison to the world: 70 Labour Force by Occupation: • agriculture: 11.7% • industry: 28.) .528 million (2011 est.5% • services: 59.Labour Force • 5.

) • country comparison to the world: 130 • 10.4% (2011 est.8% (2010 est.) • • • • Inflation: 3.) .2% (2011 est.4% (2010 est.Unemployment & Inflation Rates Unemployment • 12.) country comparison to the world: 57 1.

6% (2011 est.) • country comparison to the world: 156 .Industrial Production Growth Rate • -1.

uk/news/business-13275470 .co.bbc.Article Portugal reaches deal on EU and IMF bail-out BBC NEWS http://www.

PORTUGAL BAILOUT .

MAJOR REASONS • Public sector debt was high • The International crises lead to a generalized raise of interests rates which affected countries with risk economies like Portugal • Rating agencies did a bad job > without concrete database started to repetedly downgrade the country and public entreprises > removing the confidence of investers > raise of interest rates .

interest rates were already near 15% .MAJOR REASONS • Instability in International markets • Interest rates start climbing really fast • Finance Minister alert that when rates arrive at 7%. country should ask for IMF and EU aid • Socialist Prime Minister José Socrates avoided to take measures in order to keep political and economical power • When a decision to seek external help was taken. it was already too late.

TROIKA AUSTERITY MEASURES .

REDUCTION OF PUBLIC DEFICT .

REDUCTION OF PUBLIC SPENDING  A cut in the public sector wage bill by freezing wages and forbiding job promotion • In the public sector wages above a thousand Euro were cut by 5% and wages above a thousand five hundred were cut by 10%. . • As these measures were insufficient the thirteen and fourteen months wages were abolished. • In the entrepreneurial sector of the State wages of CEO’S were reduced by 50%.

 The reduction of the pensions and abolition of pre-pensions • The reduction of wages was also applied to pensions • The pre-pension which could be achieve at the age of 60 years were abolished • Everyone has to retire at the age of 65 years old .

. from 3 years.The maximum length unemployment benefit can be paid was cut to 18 months.

Abolition of some States organisms and fusion of others • Abolition of Civil Governments • Fusion of water companies .

Suspension of almost all of public investments • TGV • Lisbon Airport .

Re-negociation of the contracts of Public – Private partnerships .

INCREASE OF REVENUE  An increase in sales tax on items such as cars and tobacco • Taxes on revenues increase from 44% to 49% • IVA increased from 13% to 23% in HORECA sector • IVA for basic goods increased from 6% and 13% to 23% .

and TAP airline • EDP ( Energias de Portugal) was sold to the Chinese • After bailout BPN ( Banco Portugues de Negocios) was sold to Angola • REN ( Rede energetica nacional) was privatized • At this current moment TAP and Aguas de Portugal are being privatized . Privatization of banks. energetic companies.

MEASURES TO EXPAND ECONOMY Changes in renting laws Improvement of eviction processes Changes in work laws on private sector  Measures to accelerate justice actions .

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Conclusion • It is too early to take conclusions of the effectiveness of the austerity measures. but Portugal main goal is to return to International markets at the end of 2013 as predicted and avoid a second rescue plan • By reducing public investment. cutting wages and pensions > Portugese families have less purchasing power > Affects local businesses and overall economy .

• Raise in taxes decreases consumption • Cuts in public investments > Has important impact in civil constructions entreprises and to overall economy > In Portugal twenty six entreprises close everyday • Unemployement is reaching high record levels > Around 15% > Decreasing state revenues on taxes and increasing state spending on unemployement subsidies .

Portugal main goal is to raise economic growth by improving it’s overall economic system .

Thanks for your attention .

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