Global uncertainty sets back AEP export targets

Two years ago the Portuguese Enterprise Association (AEP) launched a challenge for overseas exports to reach 60% of Portugal’s GDP in 2030.

However, Europe’s cooling economy amid global uncertainties and tariff wars make prospects to increase the share of company exports overseas in 2026, unlikely.

But the exports drive traced out in 2023 regarding the prospects for 2025 and 2026 are hardly promising. Indeed, instead of increasing anywhere close to 60%, Portugal’s GDP in terms of exports has been falling.

The first fall in exports/GDP in the post-pandemic period took place in 2023. (from 49.5% to 47.2%)

Then in 2024 they fell again to 45.8%. Now the downward trend is likely to continue since the evolution forecast for exports as a reflection of GDP is lower. (1.5% instead of 2% for 2025 and 1.8% instead of 2.3% in 2026)

“It’s true that Portugal today is further from the export target of at least 60% of GDP by 2030”, admitted the board president of the AEP, Luís Miguel Ribeiro in an interview with Journal Económico.

“That’s because there’s an adverse international situation marked by geopolitical instability, trade tensions (tariff wars) and wars.”

Luís Miguel Ribeiro said it was difficult at this phase to pinpoint what could have the severest impact on the country, but he identified a common denominator: a high level of uncertainty which is acting as a brake on greater buoyancy in the Portuguese export market.

He referenced the “lack of predictability in supply chains, market instability, and international trade tariffs which had led many companies “to postpone investment decisions in overseas markets which in turn limits growth and the weight of exports in Portugal’s GDP.”

The current trade wars will be felt in 2026 with overseas demand for Portuguese goods forecast to fall to 1.9% after being 3.3% in 2025.

And says that while direct exposure because of trade with the US will be relatively limited, the indirect effects will amplify the overall impact given that the other European economies will be equally penalised.

Therefore, the impact on Portugal’s growth rate could be in the region of 0.15% in 2026, with 0.06% in direct impacts.

For example, transport machinery (such as vehicle components) is a key export sector for Portugal with Germany being one of the main client markets but one of Germany’s main exports to the US are cars, and so this effects Portugal in the supply chain.

“The climate of uncertainty over institutional factors in international trade is huge” says economist Nova SBE economist Pedro Brinca referring to the effect of tariffs and who doesn’t believe that the amount of exports in terms of GDP will increase much any time soon.

Source: Jornal Económico