Forum for Competitiveness slams Portugal for having ‘clear divergence’ from EU average

The Forum for Competitiveness, a Portuguese business group, criticized in a statement last Friday, the “clear divergence of Portugal” from the European Union average, where income per inhabitant is concerned.

In the statement, signed by Pedro Braz Teixeira, the Forum recalls that “between 2000 and 2018, most new EU member states have achieved remarkable convergence with the European average.”

The body highlights the case of Lithuania, whose income per inhabitant has more than doubled in relative terms (from 40% to 81% of the EU average), of Latvia (where it has gone from 37% to 68%) and Romania (from 33% to 61%).

“In total and flagrant contrast to the good showing of all these countries, Portugal had an opposite performance, of clear divergence, having fallen from an income that was, in 2000, 84% of the European average, to only 74% in 2018,” it states.

The document shows that Portugal has been overtaken by six countries: Estonia, Lithuania, Slovakia, Slovenia, the Czech Republic and Malta. Another two, Hungary and Poland, both with an income of 73% of the average, could well overtake Portugal this year, while Latvia, given its rapid development, should also do so before long.

“We would then be the fifth poorest country in the EU,” the Forum statement notes.

It stresses that “between 2000 and 2018, Portugal received enormous resources in European funds, more than 79 billion euros”.

Also, at the beginning of 2000, Portugal’s external indebtedness was “45 billion euros and in September 2018 it had risen to 205 billion euros”. At the same time, the public debt increased from 65 billion euros to 246 billion euros.

“If we had gone into debt so as to converge, there might be some justification for this, but as it is, there is no excuse whatsoever,” said the note.

The Forum also noted that in the fourth quarter of 2018, the Portuguese economy’s annual rate of growth was between 1.8% and 2.0%, “a slowdown from 2.1% in the previous quarter”. For the year as a whole, growth would have been between 2.1% and 2.2%, a sharp slowdown compared to 2.8% of 2017″.

Unemployment was stable in December, at 6.7%, one-tenth above the September and October rates; the Forum believes that it will continue to fall but at a slower pace.