## Portugal: Recovery and Risks

_IMF News, September 13, 2018_

## Source details

**Canonical URL:** [Portugal: Recovery and Risks](https://www.imf.org/en/news/articles/2018/09/11/na091318-portugal-recovery-and-risks)

## Other formats

- [Markdown version](/en/news/articles/2018/09/11/na091318-portugal-recovery-and-risks/index.md)
- [Structured JSON version](/en/news/articles/2018/09/11/na091318-portugal-recovery-and-risks/index.json)
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## Bibliographic details
- Published: September 13, 2018

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### Recovery and Growth
- Real GDP growth reached 2.7 percent in 2017, the highest rate since 2000.
- In 2018, real GDP should grow by 2.3 percent.
- Recovery driven by re-energized investment, robust exports, and stable consumption, supporting a rebalancing of the economy.
- Investment and exports are highlighted as strong drivers of the job-rich recovery.

### Labor Market and Employment
- Job-rich growth: the unemployment rate fell to a record low of 7. 1 percent in April 2018.
- Employment grew by 3.3 percent in 2017.
- Labor force participation increased by 1.1 percent in 2017.
- Long-term unemployed are returning to work in large numbers.

### External Sector
- Trade has played an increasingly important role as a driver of economic growth.
- Booming tourism has boosted services; exports of services have offset an increase in goods imports.

### Public Debt and Vulnerabilities
- High public debt is a major vulnerability.
- Under current policies, Portugal's debt-to-GDP ratio is projected to decline by 23 percentage points from its 2017 level to 103 percent in 2023.
- Given its high starting point, Portugal needs to keep public debt on a firm downward trajectory to build buffers against future shocks and maintain investor confidence.

### Fiscal Performance and Policy Recommendations
- Fiscal performance in 2017 was robust, reflecting strong economic growth, controlled budget execution, and falling interest costs.
- Continued fiscal discipline will be key to reducing debt.
- Fiscal consolidation should focus on a sustainable plan to reduce current expenditure, with particular attention on wages and pensions.
- Fiscal discipline is described as a cornerstone of debt reduction.

*Portugal: Recovery and Risks — September 13, 2018*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Read the report](http://www.imf.org/en/Publications/CR/Issues/2018/09/12/Portugal-2018-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-46224)
- [Read the press release](http://www.imf.org/en/News/Articles/2018/09/12/pr18345-portugal-imf-executive-board-concludes-2018-article-iv-consultation)
- [Selected issues](http://www.imf.org/en/Publications/CR/Issues/2018/09/12/Portugal-Selected-Issues-46225)
- [Portugal and the IMF](https://www.imf.org/external/country/prt/index.htm?type=56)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2018/09/11/na091318-portugal-recovery-and-risks_