Portugal must reduce its reliance on tourism says Finances minister

Portugal’s Finances minister, Joaquim Miranda Sarmento says that Portugal must concentrate more on innovation and technology and less on tourism which now represents around 20% of the country’s GDP.

Speaking at the Web Summit on Thursday, the Finances minister said: “We need to increase our capacity to export goods and services”.

“Tourism is a very important sector for Portugal’s economy, accounting for close to 20% of GDP, but we have to reduce this importance. The only way for the country to grow in order to increase people’s incomes and improve public services is with innovation, services and high technology”, defended Joaquim Miranda Sarmento on a panel at the Web Summit that discussed Portugal’s economic challenges.

According to the Minister of Finances, Portugal had redirected its economy towards exports, arguing that the country is “exporting much more than 15 years ago”, especially in terms of technology, and that this share currently represents 50% of GDP. “This is the path we must follow,” he insisted.

In addition to the need to diversify revenue sources, from the Minister’s point of view, “the main problem of Portugal’s economy” is the “lack of human capital”, a challenge that affects, above all, the economic sectors most dependent on foreign human resources, such as hotels, restaurants and agriculture.

“There isn’t an economic sector that does not complain about a shortage of workers. We are changing immigration rules, regulating and attracting people who work in these areas with contracts,” Miranda Sarmento explained, noting the efforts being made to attract highly qualified professionals, either through the NHR tax regime and the IRS Youth regime. These tax benefits, he said, would “attract workers from all sectors.”

The issue of taxation is also a relevant aspect in the business network, says Miranda Sarmento.
Although he recognised that there was no “silver bullet”, the minister said Portugal needed to “simplify the tax framework” for companies because it was still “very complex” and “stabilise it” in order to avoid changes “every year”. This would increase productivity at a national level.

Picture: The Minister of State and Finance Government of Portugal Joaquim Miranda Sarmento (L) speaks on the talk “What next for the Portuguese economy?” at Web Summit in Lisbon, Portugal, 14 November 2024. The web summit lasted until November with the main focus on fostering meaningful connections and communities through meet-ups powered by Summit Engine, Summit Web’s software MIGUEL A. LOPES/LUSA
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