Portugal Case Study

Decent Essays
Deficit Procedure”, which meant that Portugal’s public finances would no longer be under the corrective arm of the Stability and Growth Pact (GBP). In fact, Portugal’s budget deficit fell to 2 percent of GDP, far below the limit of 3 percent in the MoU, being the lowest since the early 90s. Equally important to mention was the unemployment rate which decreased to an eight-year low of 9.2 percent in May 2017, number that seemed to be impossible to reach after an all-time high of 17.5 percent in the first quarter of 2013. Additionally, after the credit rating agencies Moody’s, Fitch, and Standard and Poor’s downgraded Portugal’s rating to junk status in 2011 and 2012, S&P, one of the world’s three biggest ratings agencies, raised Portugal…show more content…
The adoption of a single European currency (the euro), the free trade, and the removal of non-tariff barriers contributed to a reduction of transaction costs, and consequently to a reduction of costs and prices for the Portuguese consumers. Additionally, it became much easier to do business and travelling in the Eurozone. In 2016, there was a boom in the travel and tourism industry, which had a huge economic impact in the Portuguese economy, generating a total contribution of EUR 30.8 billion (16.6 percent of GDP), and adding 905.000 jobs in the sector. In 2016, Portugal, a peaceful country known for its fantastic beaches, food, warm climate, and historic cities, welcomed 11.4 million foreign tourists, mainly British, Germans, Spaniards, and French. For the past few years, Portugal won several important world travel awards, which reflects the development and modernization of infrastructures and technologies that the country suffered along the years. Furthermore, the free movement of people contributed to a more flexible labor market, making easier to fill shortages of workers in some specific fields and in certain regions. For example, it is very difficult to find doctors and other specialized workers, such as teachers and engineers, to work in the interior of
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