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Portugal Economy - History

Portugal Economy - History

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GDP (2008): $237.35 billion.
Real GDP growth (2008): .2%
Per capita GDP (2008): $22,000.
Rate of inflation (2008): 2.9%.

Budget: Income .............. $108.6 Billion
Expenditure ... $114.7 Billion

Main Crops:

Grain, potatoes, olives, grapes; sheep, cattle, goats, poultry, beef, dairy products .Natural Resources: Fish, forests (cork), tungsten, iron ore, uranium ore, marble .

Major Industries: Textiles and footwear; wood pulp, paper, and cork; metalworking; oil refining; chemicals; fish canning; wine; tourism .


Portugal has become a diversified and increasingly service-based economy since joining the European Community in 1986. Over the past two decades, successive governments have privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country qualified for the European Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU member economies. Economic growth had been above the EU average for much of the 1990s, but fell back in 2001-08. GDP per capita stands at roughly two-thirds of the EU-27 average. A poor educational system, in particular, has been an obstacle to greater productivity and growth. Portugal has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. The budget deficit surged to an all-time high of 6% of GDP in 2005, but the government reduced the deficit to 2.6% in 2007 - a year ahead of Portugal's targeted schedule. Nonetheless, the government faces tough choices in its attempts to boost the economy, which grew by 0.9% in 2008, while keeping the budget deficit within the euro-zone 3%-of-GDP ceiling.

The Biggest Industries In Portugal

Portugal has the 40th largest export economy in the world.

Portugal is located to the west of Spain on the Iberian Peninsula, where it is a member of the European Union. This country has a gross domestic product (GDP) of $205.86 billion that when adjusted for purchasing power parity is equal to $310.651 billion. With a total population size of over 10.37 million, the average GDP per person (when adjusted for purchasing power parity) is $30,192. The total labor force here is only 5.2 million, a number that has been decreasing recently as unemployed individuals leave to look for employment opportunity elsewhere. As of 2012, just after the global economic crisis, approximately 45.4% of the population of Portugal was at risk of poverty. This number was inflated, however, by the high percentage of unemployment in this country at that time.

The economy of Portugal has bounced back since the global economic crisis and is now reporting an annual growth in GDP of 1.5%. This country exports a total of $54.7 billion worth of goods on an annual basis, making it the 40th largest export economy in the world. Additionally, it imports approximately $67.1 billion, giving Portugal a trade deficit of $12.4 billion.

This economy here once relied heavily on the manufacturing (also known as industry sector), although today it is moving more towards the services sector. For example, the majority of the working residents in this country are employed by the services sector (69.1%). This sector is followed by industry (24.5%) and agriculture (2.4%). Within the industry sector, corporations operating in this country tend to produce the following goods: machinery, automotive and ship parts, textiles, refined oil goods, plastics, food products, and beverages.

Portugal Economy - History

The modern nation of Portugal had its origins in the northwest of region of what is now Spain i.e., Galicia and Asturias. The Moslem conquest of Iberia had defeated the Visigothic kingdoms of the south and the Christians who fled to the still-Christian mountains of the north dreamed and plotted the reconquest of Iberia. And they passed this dream on to their descendants.

The areas of Iberia under Moslem control prospered with the introduction of new crops, new agricultural methods and efficient administration. Islamic rulers also promoted learning and scholarship. But along with the prosperity came dissension and strife among the factions of the Moslems. Arab, Syrian and North African factions struggled with each other for political dominance.

However, the conflict between the Moslems and Christians continued. The area between the Douro and Minho Rivers in the west became a battleground in the struggle. The Christian effort at reconquest ebbed and flowed, but by 868 AD Christian forces had captured Cale, the old Roman fort which controlled the crossing of the Douro River. The name of the region, Port of Cale, is the origin of the name Portugal.

At the time, the reconquered territories were part of the Kingdom of Leon, but linguistically that part of Iberia was distinct from Castile and Leon. Portuguese is virtually identical to the language of Galicia, the northwest corner of Iberia.

Alfonso VI of Leon made the region of Portucale part of the dowry of his daughter Teresa when she married Henri, a French Burgundian knight fighting for the Reconquest. Henri was a count but upon his death in 1112 Teresa began calling herself queen. She subsequently married a Galician nobleman. This Galician tie alienated the noblemen of Portucale and they supported Teresa's son by Henri, Alfonso Henrique, for the kingship of Portucale.

In 1128 Prince Alfonso Henrique captured his mother and her husband and exiled them to the area south of the Minhos River. But Alfonso Henrique not only rebelled against his mother, he rebelled against the authority of the King of Casilla-Leon. After a significant victory over Moslem forces at Campo de Ourique, Alfonso Henrique began to call himself king. In 1143 Alfonso Henrique requested from the Pope the recognition of Portucale as a vassal state of the Vatican and thus independent of Casilla-Leon. The request was subsequently granted. Thus the modern nation of Portugal emerged separate from Spain.

Portugal Economic Snapshot

After falling sharply in 2020, GDP is projected to increase by 3.7% in 2021 and 4.9% in 2022. Consumption will strengthen, with a gradual reduction in saving, as the sanitary situation improves and containment measures are phased out. Strong activity in the manufacturing sector and the absorption of EU funds will support investment and exports. Tourism and contact-intensive services will recover only gradually, until the pandemic is fully under control.

Reform Priorities (April 2021)

Going for Growth 2021 - Portugal

The pandemic highlighted gaps in the social safety net and risks aggravating the situation for disadvantaged students and vulnerable workers. Increasing the coverage of out-of-work benefits should become the top policy priority. Strengthening efforts to provide individualised support to students at risk remains crucial, as does upskilling of large parts of the workforce, especially with digital skills.

2021 Structural Reform Priorities

  • Labour market: Reinforce social protection for non-standard employment to reduce precariousness and poverty
  • Education and skills: Raise skills to strengthen productivity, foster the creation of higher quality jobs, and improve equity and well-being
  • Competition and regulation: Strengthen competition in non-manufacturing sectors to bolster export competitiveness and productivity
  • Insolvency: Reduce high corporate leverage to raise investment and promote job creation
  • Tax system: Reduce exemptions and special rates to enhance efficiency of the tax system and strengthen public finance sustainability

2019 Economic Survey of Portugal

The Portuguese economy continues to recover, with past structural reforms and more favourable global economic conditions contributing to the upswing. The economy has largely been sustained by strong export performance since 2010, but domestic demand is now also growing solidly. After receding in the five years following the crisis, employment has picked up and the unemployment rate has fallen from 17% to below 7%. Over the same period, the economy has notably increased its reliance on some renewable energy sources, such as wind power.

Portugal Economy - History

PORTUGAL'S POLITICAL ECONOMY holds our interest for a number of reasons. First, Portugal, a founding member both of the North Atlantic Treaty Organization (NATO) and the European Free Trade Association (EFTA), one of the newest members (along with Spain) of the European Community (EC). Second, scholars interested in revolutionary change and the associated economic consequences can compare the Portuguese experience with that of other nations that have undergone rapid systemic transformation. Third, Portugal's recent experiment with nationalization of the means of production will be of particular interest to students of industrial organization and public enterprise economics.

As a fledgling member of the EC, Portugal was required to adopt the EC's Common External Tariff on imports from nonmember countries and the Common Agricultural Policy (CAP). Portugal also was pledged to eliminate all barriers to the movement of goods, services, and capital between itself and the other members of the European Economic Community (EEC), as well as to phase out fiscal subsidies that distort competition. During a transition period ending in 1993, Portugal was a net recipient of EC funds to assist in the restructuring of its relatively backward economy.

At the beginning of the 1990s, Portugal's economy was classified by the World Bank as an upper-middle-income economy. Its 1990 gross domestic product (GDP) on a purchasing power parity basis was US$82 billion, and its per capita GDP was estimated at US$8,364. With a per capita GDP growth rate of 5.4 percent in 1989, Portugal moved ahead of Greece to eleventh place among the twelve members of the EC.

Several distinctive features characterized Portugal's economy at the time of its accession to the EC one of the most striking was its dependence on foreign "invisible" income. This income, consisting of tourism receipts and emigrant worker remittances, financed the country's large merchandise trade deficit. The growth and magnitude of tourism together with the explosive rise of government services largely explain the expansion of the services sector to nearly 56 percent of GDP in 1990 from 39 percent of GDP in 1973. One of every three Portuguese workers in the active labor force was engaged in temporary work in highincome countries, mainly France. These emigrant workers, numbering about 2 million, contributed significantly to Portugal's foreign exchange income, as well as to the country's household savings. Although less educated and technically less proficient than their EC counterparts, Portuguese workers were recognized for their strong work ethic and frugality.

Another distinguishing feature was Portugal's anachronistic agricultural sector, whose overall performance was unfavorable when considered in the context of the country's natural resources and climatic conditions. In the mid-1980s, agricultural productivity was half that of the levels in Greece and Spain and a quarter of the EC average. The land tenure system was polarized between two extremes: small and fragmented family farms in the north and large collective farms in the south that proved incapable of modernizing. The decollectivization of agriculture, which began in modest form in the late 1970s and accelerated in the late 1980s, promised to increase the efficiency of human and land resources in the south during the 1990s.

A third economic distinction was the scale and sectoral spread of Portugal's public enterprises. Before the Revolution of 1974, private enterprise ownership dominated the Portuguese economy to a degree unmatched in other West European countries in 1982 the relative size of Portugal's public enterprise sector (based on an average of value added, employment, and gross capital formation) substantially exceeded that of the other West European economies.

The dispossession of the family-based financial-industrial groups, together with the "antifascist" purges of the mid-1970s, inflicted a serious "brain drain" on Portugal through the exile of entrepreneurs and professional managers. Recent Portuguese governments have recognized the highly politicized public enterprise sector as a major obstacle to the resolution of macroeconomic problems, such as large fiscal deficits, inflation, and burdensome external debt.

Portugal's commodity trade increasingly has become dominated by the EC, and since the accession of both Iberian countries to the organization in 1986, Spain has suddenly emerged as a significant trading partner for Portugal, whose major commodity exports at the beginning of the 1990s included textiles, clothing, and footwear, machinery and transport equipment, forest products (including pulp and paper and cork products), and agricultural products (mainly wine). With the rising participation of multinational firms, Portugal also was gaining competitive strength in the export of higher technology automotive and electronic components and parts.

Privatization, economic deregulation, debt reduction, and supply-side tax reform became the salient concerns of government as Portugal prepared itself for the challenges and opportunities of full participation in the EC's single market in the 1990s. These market-driven policies deserved much of the credit for Portugal's economic resurgence. Led by surging exports and robust capital formation, Portugal's GDP grew by an annual rate of 4.6 percent from 1986 to 1990. During this five-year period, only Japan among the Organisation for Economic Co-operation and Development (OECD) countries exceeded Portugal's economic performance.

Portugal’s Economic Recovery: How Much Came from Ditching Austerity?

Portugal is celebrating an economic recovery after a prolonged recession that began in 2003 and worsened after the 2008 Great Recession. The nation’s GDP grew 2.7% in 2017 — the highest in many years — and while that is projected to taper off some this year, growth should still hit 2.2%.

There are a least two views about what has led to the recovery. One suggests that Portugal’s decision to end the harshest IMF/EU austerity measures in 2015, and boost spending and investment led the charge. Another is that Portugal simply benefited passively, along with others, from a strong recovery in Europe overall.

As a New York Times report observed, with various officials quoted to support the view, “At a time of mounting uncertainty in Europe, Portugal has defied critics who have insisted on austerity as the answer to the Continent’s economic and financial crisis.”

The austerity measures demanded of Portugal via the International Monetary Fund and the European Union were widely viewed as tough, and entailed severe spending cuts, cutbacks of wages, pensions and social security. In return for accepting the cutbacks, the IMF/EU agreed in 2011 to bail out Portugal with $90 billion to manage its fiscal deficit, capitalize weak banks and reduce nonperforming loans, improve employment, and gain greater access to world financial markets.

The Times’s story goes on to note that in 2015 Portugal took a “daring stand” when it “cast aside the harshest austerity measures its European creditors had imposed, igniting a virtuous cycle that put its economy back on a path to growth.”

The country reversed the cuts noted above and instead “offered incentives to businesses.” That reversal and a willingness to boost spending “had a powerful effect. Creditors railed against the move, but the gloom that had gripped the nation through years of belt-tightening began to lift. Business confidence rebounded. Production and exports began to take off,” notes the Times’s story.

“When the tide comes in, all the boats go up and that’s what happened to the Portuguese economy.” –Joao Borges de Assuncao

But Wharton finance professor Joao Gomes, a native of Lisbon, said that Portugal’s economic recovery is better understood in the context of the broader recovery across Europe, which he rated as “excellent.” Portugal has benefited from Europe’s economic recovery in a few ways: tourism, exports and increased domestic investment. These have helped reduce the unemployment rate from its peak of 17.5% in the first quarter of 2013 to 7.9% in the first quarter of 2018.

Joao Borges de Assuncao, a professor at the Católica Lisbon School of Business and Economics in Lisbon, said Portugal’s ongoing economic recovery has made it “a poster child for what could be done differently in the context of the European recovery.” His view is that the country’s rebound began when some of the austerity measures were ended, allowing it to bounce back from the 2008 Great Recession and three years of negative GDP growth and high unemployment. De Assuncao was formerly economic advisor to the Portuguese President in 2006-2016 and to the Portuguese Prime Minister from 2002 to 2004.

Portugal’s recovery was helped by “a benign external environment,” which made possible “a job-rich and broad-based growth,” according to the view of the IMF in its latest report in February, echoing the view of Gomes. Suggesting the nation is not out of the woods entirely, the report also noted that it still faces vulnerabilities with potentially higher interest rates, high public debt to GDP ratios, bad loans on bank balance sheets and the possibility of “cyclical downturns” in its trading with its partners. The IMF called for “durable expenditure reforms,” and stronger bank balance sheets to make it possible for Portugal to provide new credit for investment.

De Assuncao and Gomes discussed Portugal’s economic growth and the challenges on the [email protected] radio show on SiriusXM. (Listen to the full podcast at the top of this page.)

Big Stimulus Programs Helped

[email protected] High School

Portugal had much to gain from the European Commission’s Investment Plan for Europe that European Commission President Jean-Claude Juncker unveiled in November 2014. “Europe committed to this plan to effectively stimulate or subsidize investment throughout various parts of the EU, mostly in the South but not exclusively, by just essentially providing matching funds to a number of programs that qualified under certain criteria,” said Gomes. One feature helping Portugal is financial aid for small businesses enterprises. That added some 2 billion euros to the economy, or about 5% of total investment.

Gomes also pointed out that the biggest boost Portugal received from Europe’s recovery came via exports, with the continent taking up 75% of the country’s exports of goods and services. De Assuncao agreed: “The big change is essentially exports, including services,” linked to the overall improvement in Europe’s economy, particularly over the last two years. “When the tide comes in, all the boats go up and that’s what happened to the Portuguese economy.”

A Tempered View

Gomes also brought a sobering note to the excitement over Portugal’s economic recovery. “You can call it a recovery, but we’re still far below where we were just before the crisis. Look at every single number. Taxes relative to GDP are 44% — they haven’t budged one bit. The government collects the same amount of revenue that it did it spends the same amount that it did, except for some one-offs in aid to the financial sector. The deficit is basically the same. Public investment is basically the same.

“There’s just not a lot of room to go forward, if we don’t increase productivity.” –Joao Gomes

“The boom has been mostly because of housing to some extent, hospitality and some side benefits of the Juncker plan for Europe, which has really subsidized investment in Portugal in the last couple of years.” Still, investment remains 25% below 2008.

Productivity Is Key

Gomes said productivity growth is critical if Portugal is to continue its economic rally. “The real cloud in the story over the last 20 years or so is that [Portugal is] just not more productive. There’s just not a lot of room to go forward, if we don’t increase productivity.” With higher employment, it is important to have higher productivity as well to improve wage rates and living standards, he explained.

De Assuncao noted that Portugal has seen increased investment, most of that has come from the private sector. But that, too, has left something to be desired. “It should have been much, much higher,” he said. “Investment went down as much as 40% from its peak, or 44% cumulatively from 2002, and we have only recovered 25% of that. We need a few quarters of growth of around 10% to catch up and bring back the levels that the Portuguese economy requires.”

And more investment is essential to achieve productivity gains, de Assuncao added. “Last year, the growth in employment was much larger than the growth of GDP, with the consequence that we had negative productivity gains. And for us to get productivity gains we need private investment – most public investment is not productivity enhancing.”

One reason for that skewed impact of investments on productivity is that the Portuguese economy is not sufficiently broad-based. “We need a lot more diversification in our in our economic base,” de Assuncao noted. But for now, the recovery has boosted economic sentiment, which in itself could provide further impetus. “It affects the outlook of people and all the surveys indicate that the public mood is a lot better, so there is a lot more confidence and that also helps the recovery,” said de Assuncao.

The Tourism Opportunity

Gomes saw tourism as “the only obvious place” for fresh economic growth, and said that could benefit from growth in Europe, although if Britain’s planned exit from the European Union proceeds, it could dampen that optimism some. Tourism is important also from a productivity standpoint because Portugal has an aging population, made worse by outward migration of its youth in recent years, said Gomes.

De Assuncao elaborated, agreeing that tourism is the most obvious source of economic growth — in the short term. “The problem is that tourism is small in Portugal and it will never be very large.” Thus, tourism cannot provide the engine for economic growth Portugal needs. He added that it would be hard to extract productivity gains in tourism because it is labor-intensive and most of its capital investments are linked to real estate.

Against that backdrop, de Assuncao reiterated his call to diversify the economy. But doing so requires public policy steps and the tendency is for the government in charge to select favorites, and thus make mistakes, he said. Portugal’s “best bet”: Increase eurozone participation. “The more we participate across all projects with other European countries that share the same regulatory environment, the same currency, and the same market rules, we can spread to many other industries.”

Among the main challenges Portugal faces is its “very fragile banking sector,” saddled by non-performing loans given to “friends of the government,” said de Assuncao. Many of those loans are linked to real estate and higher real estate prices will make it easier to regularize them. De Assuncao echoed the IMF view in noting that the economy is “extremely vulnerable” with its debt-to-GDP ratio of 126%. “If interest rates go up – and they will they will pretty soon – it will be a huge problem because we would lose quite a bit of interest income to the outside world.”

“It’s great to see people doing so much better, so much happier, and so much more confident of the future.” –Joao Gomes

“Portugal is maxed out on [its] credit cards,” said Gomes, adding that higher interest rates could spell doom. In that scenario, “the focus has to be relentlessly on growth.”

Among Portugal’s remaining woes is that the global financial crisis led to many among its millennial generation to migrate to other parts of Europe, Africa, Brazil and the U.S., Gomes noted. “They are some of the most talented, most highly educated individuals — the ones who have the option to move somewhere else. It’s a deficit of talent that we will not recover from in a generation. I think we’re not going to attract them back.”

Like others, Portugal also faces its share of global risks, such as the fallout from the U.S. trade war with China, said de Assuncao. “The countries that are weaker, like Portugal and Italy, will be extremely vulnerable to those developments. So we need we need to prepare for that.”

Enjoy the Party

Meanwhile, Portugal should take a pause and “stop complaining” de Assuncao suggested. “We are enjoying this boom. It has been unusual and so people are happy. Maybe right now the best thing to do is to enjoy the party. At the same time, do not destroy the gains — do not allow the deficit to get out of line. We need a very steady hand by the government.”

He also cautioned the government against giving handouts in the form of bonuses to civil servants and tax discounts to restaurant owners, as it has done in the past. Added Gomes: “It’s great to see people doing so much better, so much happier, and so much more confident of the future.”

“We are still in many ways an example for other countries that hardship can be overcome,” said de Assuncao. “In many ways, we were able to overcome that with limited internal strife, especially compared to other European countries which are still in a very dire situation.”


Until the mid-1980s, Portuguese economic history existed in relative isolation from the main international currents. A relationship did exist with the French literature of the Annales school, which had influenced Vitorino Magalhães Godinho and others. And historians such as Borges Macedo or Oliveira Marques were aware of some of the international trends. But in the research being produced in Portugal, a comparative and quantitative approach, firmly rooted in the notion of the counterfactual, was altogether missing from the literature.

This picture was about to change abruptly with the appearance of a modern classic, Reis ( Reference Reis 1984). From then onwards, the modern Anglophone approach to economic history has become more frequent in Portugal, though it has never become dominant relatively to the exclusively narrative, descriptive approach of traditional historians.

Portugal's much improved quality of research infrastructure, including university libraries and archives over the last four decades, has led to much easier access to (and interaction with) international scholarship. Together with freedom from censorship since the implementation of democracy and the later appearance of the internet, these developments have led to noticeable improvements in the quality of the research produced. Most of Portugal's historians are still very much rooted in Portuguese institutions, and studying economic history outside the country is still the exception rather than the norm, but a generation of doctoral students at the European University Institute and elsewhere has focused on Portugal in a comparative perspective, and many of them now teach in Portugal. All of these developments have led to a noticeable methodological improvement in the type of papers that are written, as well as a more nuanced understanding of Portugal's history, as a result of having a much more comparative outlook than used to be the case.

This monographic issue is representative of the best work done in recent years, and it shows how much more integrated Portuguese economic history is now with international trends. From the submissions received, we selected six papers to be reviewed, and following a rigorous refereeing process, eventually four of these have been accepted by the scientific committee, which included the editor in chief, Blanca Sánchez Alonso, Jaime Reis and myself. Footnote 1 It is noticeable that all the accepted papers use quantitative, comparative approaches, and are written by relatively young authors, all of which either work for foreign institutions or have had considerable international experience.

The papers appear in this special issue by chronological order. The first paper, «Investing in a Frontier Economy: Portugal, 1230-1500» is by António Castro Henriques (Universidade do Porto). This paper brings capital into the debate concerning Iberia as a frontier economy during the post-Reconquest, post-Black Death era. That debate is usually framed in the literature in terms of land-labour ratios — which were evidently high — but the role of capital as an input in production tends to be left out. Henriques shows that Portugal's condition as a frontier economy meant that capital — insofar as investment in land to rent was concerned — commanded low interest rates in Portugal by comparison to other Western European countries. This result, together with the author's earlier work (Henriques Reference Henriques 2015) seems of fundamental importance for our understanding of Portugal's situation in the late Middle Ages, and seems likely to have important implications for future work.

The second paper, «Reconsidering the southern European model: Marital Status, Women's Work and Labour Relations in mid-eighteenth-century Portugal», is authored by Filipa Ribeiro da Silva (International Institute of Social History) and Hélder Carvalhal (Universidade de Évora). Despite some caveats, their paper is a remarkable pushback against the literature which paints premodern Southern Europe as particularly patriarchal in comparison with Northwestern Europe. The authors show that Portuguese women did not become less active in the labour market, after marriage, than was the case in Northern European countries — a result that contrasts what the literature previously assumed for Southern Europe.

The third paper, by Eric Golson (University of Surrey), shows that Portugal during the Second World War, while in principle politically neutral, was in fact closer aligned with Allied (and in particular, British) interests, both financial and political. The author provides a new standardised balance of payments, and shows that, at least from the signature of the 1940 Anglo-Portuguese clearing agreement, Portugal heavily favoured British war effort interests. According to the author, the Portuguese were willing to lend in total over a quarter of a year's GDP during the war to the British — a remarkable figure with no German parallel. The author furthermore advances an innovative hypothesis for why this was the case: the role of the British in supporting the continued viability of the Portuguese Empire, as well as supplying mainland Portugal with goods. The author's point that as the situation stood in the Second World War, Portuguese and British interests were aligned and of importance for our understanding of the period.

Matilde Machado (Universidad Carlos III) and Pedro Maia Gomes (Birkbeck College, University of London) are the authors of the fourth article: «Literacy and primary school expansion in Portugal: 1940-62». These authors estimate, using county-level data, the causal impact on enrollment and literacy of a massive primary school construction program which began in 1940 (Plano dos Centenários). The authors' main result is that public policies in the form of school construction was responsible for a 80 per cent increase in enrollment and a 13 per cent increase in the literacy rate of the affect cohorts until the 1960s. But beyond this, this paper has several remarkable results. The authors are well aware that school construction was not random instead, they specifically study empirically the selection logic of school construction. Their results show that areas with initially lower literacy rates as well as younger demographic characteristics were privileged. This is a rather remarkable result which confirms that the Estado Novo regime actively worked to eradicate illiteracy among the least privileged members of society.

All of these papers break new ground in destroying current prejudices with regard to Portugal's history. The paper by Henriques studies in detail the agricultural and capital market situation during a period when the historical emphasis has been traditionally put in the process of the fifteenth century Discoveries. But it should be evident that the background which Henriques studies here systematically for the first time was of much more immediate importance to the everyday life of the late Medieval Portuguese, and also that we can hardly understand Portugal's expansion, to which so much attention has been given in the traditional literature, without first understanding this background.

The paper by Ribeiro da Silva and Carvalhal, in turn, presents evidence which is destructive of a long-standing cultural bias against southern Europe. The implicit hypothesis in much of the literature (see for instance, De Moor and Van Zanden Reference De Moor and Van Zanden 2010) is that the higher levels of gender equality which did become evident in Northern Europe by the last quarter of the twentieth century had very long historical roots in the style of the persistence literature. By presenting evidence against this, Ribeiro da Silva and Carvalhal contribute towards the elimination of one candidate explanation for understanding Portugal's failure to enter modern economic growth until the 20 th century.

The papers by Golson, and by Gomes and Machado, in turn, show a much more nuanced view of the Estado Novo than the politicised notion of a fascist regime which kept the country poor and illiterate — accusations which are today frequent from some professional historians and the general public. In fact, while the Estado Novo strategically adopted some of the external trappings of Fascism, the reality is instead that Salazar was a social conservative who fought the truly Fascist political forces which might otherwise have become more influential or even taken power (Pinto Reference Pinto 1994).

All authors have been required, as a condition of acceptance, to deliver their data corresponding to their paper, and this will be posted in the journal's website as Supplementary material. This will facilitate access to other researchers who can benefit from such data for their own research, and also makes it easier for others to double-check the validity of the original work. Of course, any researcher who uses the data must cite these authors, so they will also benefit.

It is my desire that Portuguese economic history will flourish during the twentieth-first century. Hopefully, this special issue represents one step in that direction.

Portugal Economy - History

A.) The Early Republic, 1910-1914

A military revolt in 1910 caused KING MANUEL II. to abdicate, after only two years of rule, and leave for exile in England. In Lisbon, the REPUBLIC was proclaimed, a PROVISORICAL GOVERNMENT formed, a CONSTITUTION passed (1911), which separated church and state. Relations with the pope were strained, as the new government pursued an outspoken anticlerical policy.

B.) Portugal Neutral, 1914-1916

Portugal, despite it's old alliance with Britain, was not regarded part of the systems of alliances which became enemies in World War I. Germany and Britain had signed a secret memorandum, agreeing on partitioning Portugal's colonial empire amongst themselves, indicating that Portugal was seen as a victim rather than a potential ally.
When World War I broke out in August 1914, Portugal remained neutral. It's location on the Atlantic coast assured continuing access to overseas markets Portugal's economy suffered somewhat from the German U-BOAT-WARFARE which sough to blockade the United Kingdom, the most important market for Portuguese products. There were clashes with German troops in southern Angola yet both the Portuguese and the German governments formally stuck to Portuguese neutrality.
Britain demanded Portugal to confiscate the German ships interned in Portuguese ports, and to sell them to Britain Portugal complied on February 24th 1916, an act to which Germany and Austria-Hungary responded by declaring war on Portugal.

C.) Portugal at War with the Central Powers, 1916-1918

Meanwhile, in 1916 South African troops, operating from Kenya, penetrated into GERMAN EAST AFRICA (modern Tanzania), ably defended by PAUL VON LETTOW-VORBECK. Lettow-Vorbeck, realizing that open warfare was not feaible any more, switched to a guerilla tactic, thus pinning down South African forces which could not be shifted to the European war theatre. Trying to evade his persecutors, he marched into Rhodesia and (Portuguese) Northern Mocambique. Lettow-Vorbeck, without communication with the homeland and without reinforcements, held out until the end of the war.
In the war, Portuguese governments had frequently changed in 1917, SIDONIO PAIS staged a coup d'etat. Portuguese troops were sent to fight in the trenches 10,000 were either killed or wounded. 60,000 died in the influenza epidemic of 1918. The Portuguese troops were of little value to the Allied cause during the spring offensive of 1918, the Germans broke through the front segment held by the Portuguese. In December 1918, Prime Minister Sidonia Pais was assassinated.
In the Peace Treaty of Versailles, Germany had to cede the port of KIONGA, hitherto German East Africa, to Portugal (Mocambique).

Portugal Economic Growth

2015 2016 2017 2018 2019
Population (million)10.410.310.310.310.3
GDP per capita (EUR)17,35018,06019,02419,87520,684
GDP (EUR bn)180186196204212
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)5.92.511.55.86.6
Exports (G&S, annual variation in %)
Imports (G&S, annual variation in %)
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate12.411.
Fiscal Balance (% of GDP)-4.4-1.9-3.0-0.40.2
Public Debt (% of GDP)131132126122118
Money (annual variation in %)
Inflation Rate (HICP, annual variation in %, eop)
Inflation Rate (HICP, annual variation in %)
Inflation (PPI, annual variation in %)-3.3-
Policy Interest Rate (%)- - - - -
Stock Market (annual variation in %)10.7-11.915.2-12.210.2
Exchange Rate (vs USD)- - - - -
Exchange Rate (vs USD, aop)- - - - -
Current Account (% of GDP)
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-10.7-11.4-14.7-17.6-20.4

Tejvan Pettinger studied PPE at LMH, Oxford University. Find out more

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Watch the video: Geschichte Portugals (August 2022).