Portuguese Exports Going Strong

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Because the Euro Zone has been struggling financially in recent years, businesses in Portugal have started looking to other parts of the world to supplement their sales. This is a growing trend in many European countries, but it is helping a great deal in Portugal and, in fact, might be a driving force behind the rebound of the country’s economy.

The Minister of the Economy has gone on record as saying that these efforts must continue, as achieving a more diverse economy through foreign trade will help Portugal recover from the near economic collapse from which it suffered. Between January and August of 2012, exports have risen by 6.7%. This equals €43.2 billion in exports over that time period, which is all money that is going back into the Portuguese economy.

It is widely known among the country’s economists that Portugal’s economy can only maintain strong growth if it has a strong export market. This is because there simply is not enough purchasing power within the country for it to go the isolationist route. Since the Euro Zone has been struggling immensely, with high profile problems coming from Greece and Spain, it makes sense that the country is going outside of its traditional trading partners in search of help. By growing the export sector, the country’s economy as a whole will strengthen, which is important to everyone within the country.

By balancing its trading, Portugal does not rely on one country in particular when exporting. This is how these historic figures have come about in the country. At the same time, however, experts readily admit that one reason for the balanced trading is that domestic demand has plummeted, which has caused the availability of excess materials.

The goal in this situation is to increase the number of exports that are sent outside of the European Union continually. If the country can maintain a 30% growth rate, it is expected that Portugal can escape the recession with fewer problems than other European countries. This is at the heart of the country’s national growth strategy, in combination with the development of more qualified workers to keep the industries going.

Currently, exports equate for about 38% of Portugal’s gross domestic product. This ca increased from 32% two years ago, so it is clear that the efforts to expand exports are working. If this growth can continue, the quality of living in the country should increased exponentially, since there will be more money and jobs available. Simply put, the more domestic products that are being sold over seas, the more jobs it will create at home because of this demand.

Another milestone for this country this year occurred when it finally reached a trade surplus. This means that it brought in more money through exports than it paid out for imports. The historic level of exports brought in a surplus of €315 million, which is all growth for the Portuguese economy. While some of the surplus was the direct result of the import slowdown, the export boom that occurred over the first nine months of the year helped considerably.

Another key point to remember is that many businesses have struggled to maintain themselves, since credit has been unavailable. The government has now set up some credit lines for struggling businesses, which should help keep them afloat as this exporting plan comes to fruition. Small and medium businesses are unable to receive bank loans at the same levels as before Europe’s economic problems, so the government plans to make additional funds available for businesses that with to export their products on a larger scale.

In the end, Portugal has realized that escaping the shadow of Spain and the rest of Europe is vital to the country’s overall success. For too many years, Portugal has relied on tourism to keep its economy strong, since the money would trickle down from wealthier European nations. With these nations now struggling themselves, there is less money available for travel and, therefore, less money trickling down to Portugal. The Portuguese government wants to start moving away from this reliance on other countries and their tourism money and start focusing on keeping Portugal strong on its own.


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Published in: Business / Guide to Portugal