Bento: “Recession can’t be ruled out”
The economist Vítor Bento, who is president of the Portuguese Banking Association, warned “an uncertain future” meant that a recession “could not be rule out” for Portugal.
Bento made his comments in an interview with the ECO online news source in the run-up to the Investor Relations and Governance Awards (IRGAwards) for which he was a jury member.
In the interview via e-mail around the time of the 34th edition of the Deloitte-organised awards, Bento also saw opportunities despite the current context stating: “The need to link the sources of production and supply of places of consumption in more developed economies appeared to provide Portugal with a further opportunity rather than a threat”.
In this he was undoubtedly referring in part to the expansion of Portugal’s port facilities at Sines where importing liquified natural gas and selling it on to European countries affected by increased demand and dwindling supply because of the sanctions against Russia over Ukraine, provided clear opportunity.
The banker said that Portuguese corporate governance had improved, but “still had a long way to go and there are cultural barriers that need to be broken down”.
Bento said that the government’s majority in parliament meant that it could be a temptation by the executive to remove what it perceived as stones in its path to governing exactly how it wanted, thereby weakening good governance (i.e., not seeking the advice and opinions of other parties and taking it into consideration).
On the other hand, the majority also gave the government the opportunity to leave a long-lasting historical legacy (referring to the €16Bn of EU bazooka funding which gave Portugal the chance to modernise and reform its economy and companies).
As to the fallout from the war in Ukraine and the sanctions on Russia, Bento said that companies would ave to deal with various risks affecting their performance, managing them to prevent damage. Risks to reputation, which include the perception that society or relevant sectors of society train themselves, were part of this raft of risks.
The economist also said that the country needed to create the conditions to retain talent and that the headquarters of decision makers needed to be based in Portugal alluding to multinational and international companies having more autonomous power to make decisions at a local level.