Portugal still lags behind EU Member States on exports says Finances minister

 In AmCham, Economy, Finance, News

Portugal’s Minister of Finances, Joaquim Miranda Sarmento says that despite just over 50% of Portugal’s production output being exported abroad, the country still lagged behind many EU Member States.

The Finances minister addressed members of the business community at a lunch organised by the American Chamber of Commerce on January 17th.

In his speech that lasted around 45 minutes, the minister highlighted the structural weaknesses of the Portuguese economy, stressing the country’s low levels of productivity that stifled economic growth and which will barely exceed 2% this year, as well as pointing out Portugal’s low GDP potential.

Listing several problems that Portugal was facing, he made mention of the government’s economic plan that had been designed to remedy some of these weaknesses and his government’s vision to tackle them.

Among them was the issue of human capital, a critical weak point linked to a low birth rate and continued emigration.

The minister stressed that the government was working to control migratory flows while creating favourable conditions to retain young talent by offering them better salaries, affordable housing, and a balanced employment law.

Regarding context costs, he emphasised the problems associated with bureaucracy, excessive regulations and complex tax rules. To combat these obstacles, he highlighted the program of 30 measures presented recently and aimed at reducing context costs and bureaucracy in the State.

In the field of economic and fiscal justice, he pointed out that from his perspective, the main problems lie not only in resources and policies, but also in management.

A challenging labour market

He also mentioned the challenges of the labour market, which is characterized by excessive rigidity for those who are already integrated in it and high levels of precariousness for those who are entering, making it one of the most problematic systems in Europe.

The minister stressed the need to invest more in Research and Development (R&D) and boost knowledge generated in Portugal to drive innovation and create value in the Market.

Moreover, he drew attention to Portugal’s companies which were small, recognising that large companies were more productive and offered better salaries.

Other priorities included attracting foreign direct investment and the need to grow companies in a country where over 90% of companies are Micro and SMEs.

Miranda Sarmento also pin-pointed the high indebtedness of Portugal’s companies and their low level of internationalisation.

In the public sector, he mentioned the difficulty for the country’s public administration in attracting and retaining talent, and reminded that many careers had seen career progression suspended for almost 20 years.

The Minister pointed to the need to address the concerns of some sectors by offering better working conditions and higher salaries to attract talent and raise the status and image of Portugal’s public sector in the eyes of Society as a whole.

Finally, the Finances minister addressed the low levels of public and private investment, emphasising that in recent years governments had simply limited themselves to “replenishing existing stock” without acheiving the necessary drive for growth.

Joaquim Miranda Sarmento rounded off by discussing the perennial ‘bete noire’ of Portugal’s administrative system, particularly its complicated and unpredictable tax system that placed high costs on companies and made Portugal’s business environment difficult.