Exports need to grow 3.4% to reach government 55% GDP export target

Portugal’s overseas trading and investment bureau AICEP says that faced with a growing scenario of economic stagnation in the Euro Zone, Portugal’s exports would have to grow 3.4% per year to attain the government’s target of 55% of all goods and services produced in the country exported overseas.

The conclusion is in a study ‘The Portuguese Economy in a Context of Global Uncertainty: Analysis of Commercial Dynamics” released by AICEP on Thursday.

The report, based on 2024, said that in nominal terms, total exports stood at €133Bn and GDP was €285Bn with the public agency estimating that exports would need to grow around around 3.4% per year in like-for-like terms for the government’s targets to be reached.

This 3.4% of like-for-like growth represents the minimum rate at which exports would have to increase per year in nominal terms to reach the target without even factoring in an economic slowdown that seems to be settling in because of the continued wars and tariffs.

In a more realistic scenario, taking into account that none of the bodies that monitor the economic development of Portugal’s economy are predicting stagnation in Portugal’s economy to 2029, AICEP forecasts that if average nominal GDP growth were 5% to 2029 – more or less in line with the experience over the past five years – , “growth in exports would to be at around 8.6%”.

With any kind of certainty beset by geopolitical tensions and wars in the Ukraine and Middle East, it is now expected GDP growth will be only 4% according to economic forecasts from the Council of Public Finances (CFP) and the International Monetary Fund (IMF) – the only two agencies that have forecasts to 2029 for the country.

But even AICEP, a public body, admits that even if the economy grows at the rate it has over the past five years, it would have to grow at 7% per year to meet the government’s target by the end of the decade.

Source: Negócios