Our comprehensive assessment of Portugal's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Portugal, as well as the latest industry developments that could impact Portugal's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Portugal before your competitors.
Portugal Country Risk
We expect Portugal's budget deficit to remain elevated in 2015-2016 due to weaker export growth and a populist policy agenda ahead of general elections in 2015, which will limit spending cuts. We furthermore caution that Banco Espirito Santo's ongoing bailout presents a significant risk to Portugal's debt and fiscal metrics from 2015 onwards.
We expect the next administration in Portugal following general elections scheduled for October 2015 to win on an anti-austerity agenda, which is likely to aggravate market confidence in Portugal, dimming the country's fiscal outlook.
Ailing demand from eurozone trade partners and limited competitiveness gains will chip away at the momentum behind Portugal's external rebalancing. We forecast the current account surplus to peak at 0.5% of...
Portugal Industry Coverage (4)
Portugal Medical Devices
Espicom Industry View: The Portuguese medical device market is the second smallest in Western Europe (WE) and per capita expenditure is low by regional standards. Most of the market is accountable to the public sector, which implemented a 15.0% medical device price cut in 2013, as part of its efforts to contain public health expenditure. The outlook for the industry is grim. On the one hand, companies are struggling in a sluggish market of low prices and lower volume purchases. On the other hand, their sustainability is in danger as the public sector owed them around US$929mn by the end of...
Pharmaceuticals & Healthcare
Portugal Pharmaceuticals & Healthcare
BMI View: The Portuguese government measures to reduce public spending on medicines will continue to weigh on the pharmaceutical sector over a multi-quarter horizon, as illustrated by a new cost-containment agreement between the Ministry of Health and the pharmaceutical industry. Among the agreed items, the government commits to ensure the partial liquidation of payment arrears by public healthcare providers to pharmaceutical suppliers over the next quarters, while the industry sector accepts to contribute to a reduction in public expenditure on medicines in 2015, through a contribution of around EUR180mn. Meanwhile, a tax on medicine sales will become effective in 2015 according to the...
BMI View: Growth in the Portuguese renewable energy market continues to be sluggish, with the country's embattled economy weighing on growth prospects in the power and renewables industries. The wind sector dominates the renewables mix. We do not expect growth to pick up markedly as investor sentiment remains low and the renewables project pipeline is limited.
Portugal has been pursuing a green energy agenda since 2001, adopting the E4 Programme (Energy Efficiency and Endogenous Energies) in the same year. This set goals for renewable power generation, in line with the wider EU Directive on renewable energy. The target was set at achieving a 39% share of renewable energy sources for gross electricity consumption by 2010, and a 31% share of renewable energy sources for total energy consumption by 2020. However, Portugal...
BMI View : Operators continue to struggle with the dual pressures of economic weakness limiting subscriber spending and market maturity in the mobile sector. Market data shows that the mobile market is contracting faster than expected and therefore we have downgraded our outlook for the mobile market. However, BMI believes that the acquisition of the largest market player Portugal Telecom will add new dynamics to the market in the short term. Fixed-line market has been more resilient than the mobile market as VoIP substitution has offset the decline of analogue lines.
Wireline voice access is forecast to decline from 4.530mn in 2013 to 4.346mn by 2018 as more consumers switch to mobiles or IP-based substitutes.