2021 - The year of all challenges

Portugal faces a set of challenges that, if not properly managed, could lead to the country being permanently "stuck" in the mire of economic stagnation.

The capacity of the Portuguese economy to recover after the slowdown observed in economic activity in 2020 (estimated at -8.4% by the OECD) appears to be less than that expected for all eurozone and OECD countries.

In fact, according to the available data in 2020, Portugal will have a GDP (in real terms) 5.1% lower than that recorded in 2019, compared to -1% in the eurozone countries as a whole and +0.7 % for the OECD.

Thus, and if nothing is done from a structural point of view to counter this lesser capacity for recovery, namely through an intelligent use of the European "bazooka", the return of the historic process of divergence between the Portuguese economy and the European average, placing us, hopelessly, on the "tail of Europe".

With regard to public finances, the OECD forecasts a budget deficit of 7.3% of GDP in 2020,  6.3% in 2021 and 4.9% in 2022, causing the public debt to rise above 136% of GDP. GDP over the next biennium.

More information: https://www.publico.pt/2021/01/04/opiniao/noticia/2021-ano-desafios-1944629