Bank of Portugal Governor Mário Centeno said in Leiria on Monday that the biggest challenge facing the country is external demand which is “less dynamic than in many crises”.
“The biggest challenge we face today is that we face an external demand for the Portuguese economy that is much less dynamic than in many previous crises or periods of the last fifteen years”stated Mário Centeno, noting that: “If a country like Portugal, with a small open economy, experiences a slowdown in external demand, the economy suffers”.
In an intervention, in English, on the challenges facing the Portuguese economy, the governor declared at the opening of a new edition of Molds Week that the biggest challenge is “not inflation”.
“I can even say that it is not even the level of interest rates”he stated, explaining that the slowing Portuguese economy “continues to grow, based on exports and investments.”
For Mario Centeno, “This is the best guarantee for the future of an economy that grows through investments and exports, not through consumption”.
“And Portugal has done this over the last ten years, so that by 2022 exports will correspond to 50% of GDP [Produto Interno Bruto]”he added, noting that “15 years ago they represented 30%, today they are more than 50%”.
However, he emphasized that, “If a country like Portugal, with a small open economy, experiences a slowdown in external demand, the economy suffers”.
“(…) External demand is expected to grow by an average of 1.7% in 2023, 2024 and 2025. This is the expectation. And I say only 1.7 because if we compare with the same variable during the adjustment program, the very difficult period from 2012 to 2014, the same number was 2.8%”1.1 percentage points above that is necessary.
According to Centeno, the country was “faced with much more dynamic external demand, even in a period when the euro was in recession,” and in the pre-pandemic period.
“From 2016 to 2019, external demand increased by 3.4%, double what we expect and predict will be the increase in external demand over the next three years”he said, and repeated it “This is a challenge for a small open economy”.
In his intervention, in which he recalled the crisis caused by the Covid-19 pandemic and how the country overcame it, he also highlighted the evolution in the field of education, classifying it as a “silent revolution”.
“For the first time in 900 years we are approaching the level of school education of our European partners”he added.
According to Centeno, the latest available figures, from 2022, indicate that 85% of young people between the ages of 19 and 24 enter the labor market with at least secondary education, and considers this a “key indicator for the economy, for society” and thus the country “can be ambitious”.
The Molds Week, which ends on Friday, is organized by Centimfe – Technological Center for the Mold, Special Tools and Plastics Industry, Cefamol – National Association of the Mold Industry and Pool-Net – Portuguese Tooling & Plastics Network, and takes place between Marinha Grande and Oliveira de Azeméis.
Source: DN
