PORTUGAL

A side victim of the Covid-19 crisis?

BB1

LOW RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD240.675 billion bn (World ranking 47, World Bank 2018)
Population 10.28mn (World ranking 87, World Bank 2018)
Form of state Parliamentory Democracy
Head of government Antonio COSTA
Next elections 2021 Presidential
  • Improving competitiveness thanks to deep structural reforms (banking sector, pensions, labour market)
  • Modern infrastructure network
  • Large companies with international presence
  • Good performance in some industrial and innovative sectors
  • Buoyant tourism sector
  • Efficient system for R&D, relatively high-skilled labour
  • Still high public debt (among the highest in the world) despite fiscal consolidation efforts
  • High private sector debt
  • Still weak banking system hampering the financing of the economy
  • Number of insolvencies still 30% higher than in 2007

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Spain 25%
1
33% Spain
France 13%
2
14% Germany
Germany 12%
3
8% France
United Kingdom 7%
4
5% Italy
United States 6%
5
5% Netherlands

Trade structure by product

(% of total)

Exports Rank Imports
Refined Petroleum Products 6%
1
7% Cars And Cycles
Miscellaneous Hardware 5%
2
6% Crude Oil
Paper 5%
3
5% Plastic Articles
Plastic Articles 5%
4
4% Pharmaceuticals
Vehicles Components 5%
5
4% Meat
Payment terms and late payment interest are regulated in accordance with applicable EU rules; however the standards put in place are among the most lenient in Europe. As a result, DSO remains excessive at around 69 days.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

The court process is a major complication when it comes to collecting debt and it is advisable to first conduct negotiation with the support of collection specialists. When court is needed, Alternative Dispute Resolution methods and foreign courts (EU judgments will be fairly enforceable in Portugal) may be worth considering in order to avoid inefficient domestic courts.

Despite reforms conducted in 2012 to increase company rescue possibilities, insolvency proceedings often lead to the liquidation of the company and it is rare for unsecured debtors to recover their debt.

Contact

Euler Hermes

Economic Research Team

research@eulerhermes.com

Georges Dib

Economist for Latin America, Spain and Portugal

georges.dib@eulerhermes.com

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