Portugal’s economy benefits €2Bn from other countries’ RRPs

Portugal’s economy will benefit from the recovery and resilience funds awarded to the other 27 countries in the EU bringing in as much as €2Bn to the national economy according to European Commission calculations.

The conclusion is from an EC study from the Directorate-General of Economic and Financial Affairs (DG-ECFIN) which has calculated that NextGenerationEU funds (an €800Bn temporary recovery instrument to help repair the economic and social damage from Covid-19) will have a €685.1Bn total impact on the 27 member-states to 2030.

Of this amount, one fifth will have spillover effects from indirect investments made in different countries other than the main direct beneficiaries.

According to the business daily Negócios, DG ECFIN estimates that Recovery and Resilience plan (RRP) investments will give the Portuguese economy a direct boost of €17Bn to which €2Bn can be added resulting from the indirect investments of other member-states, particularly Spain, France and Germany.

Outside these calculations are the reforms foreseen in the RRP, which the European Commission concluded, in previous studies, may even have a greater impact on Gross Domestic Product (GDP) than investments. Together, the reforms and investments absorb €22.2Bn of the Portuguese RRP (8.3% of GDP), of which €16.3Bn are grants and €5.8Bn loans.