News Portuguese economy - FDI Intelligence magazine highlighted Portugal’s economic expansion, describing its startling growth as a Tech Hub as well as the other sectors where foreign companies choose to invest. While Portugal’s strategic infrastructure is also significant for attracting major investments, the Portuguese economy is noted as being resilient to political uncertainty and to register higher growth figures compared to other eurozone countries.
The magazine fDi Intelligence, that is part of the Financial Times group, has written a special report on Portugal’s economic success driven mostly by its Tech Hub, strategic infrastructure, and data connectivity.
The annual average capital investment in Portugal between 2020 and 2023 is already 215% higher compared to the previous decade, according to fDi Markets.
Why is Portugal a Tech Hub?
While Lisbon is considered to be a poster child for economic expansion with its startling growth as a Tech Hub, Portugal’s tech scene has developed rapidly with the combined value of startups with headquarters in Lisbon soaring 26-fold from 818 million euros in 2016 to 21.4 billion euros in 2022 according to Dealroom.
Multinationals operating in the tech sector consider Portugal to be a preferred location, as experienced by Deloitte that recently increased its investments by 25 million euros in order to create a tech centre in Lisbon. While Deloitte is a prime example of a multinational using Portugal as a hub to export sophisticated business services, a report from fDi Markets shows that Portugal’s average number of greenfield projects in the business services sector doubled for the period 2021-2023 compared to the previous three-year period.
In what sectors do foreign companies invest in Portugal?
While tech companies are attracted to Portugal’s dynamic tech scene, foreign investors also choose the country for capital-intensive industrial investments with a high R&D component. According to Filipe Santos Costa, the CEO and chairman of AICEP Portugal Global, Portugal’s investment promotion agency, the reasons for the country’s expansion despite macroeconomic challenges are due to “a combination of talent, improved logistics, and inputs for green electricity and data connectivity.”
These are the factors that have attracted investments from multinationals with high-value brands in different sectors such as Mercedes-Benz in the automotive sector and Amgen in the pharmaceutical sector.
Portugal intends to capitalize on its geography and its industrial base to attract more nearshoring investments that will bridge the gap created by disruptions in the supply chain, stated Filipe Santos Costa, of AICEP Portugal Global in an interview with fDi Intelligence.
FDI Intelligence reported that one of the main reasons several companies chose to invest in Portugal was the fact that a cost-benefit analysis showed the country emerge as a key destination due to its relatively low cost, high quality of service and multilingual talent. Another conclusive factor includes the fact that Portugal has the 3rd highest rate of engineering graduates in the EU, producing 90,000 graduates per year, according to Eurostat.
The significance of Portugal’s strategic infrastructure:
Portugal’s strategic infrastructure is taking geographical prominence with the expansion of the Sines Industrial and Logistics Zone. According to a report by fDi Intelligence, Sines is attracting major investments such as Spanish energy company Repsol that is the biggest greenfield project over the past three years with an investment of 657 million euros for the expansion of its industrial complex.
The Sines Industrial and Logistics Zone provides excellent land and sea connectivity that will be further enhanced by two freight railway corridors that will reduce freight costs, according to Filipe Santos Costa, the CEO and chairman of AICEP Portugal Global.
What is Portugal’s economic outlook?
“The economy has been so far resilient to political uncertainty,” notes Agnese Ortolani, principal economist for Europe at the Economist Intelligence Unit (EIU).
The country is also resilient to macroeconomic headwinds and the IMF expects Portugal’s economy to grow by 1.5% and 1.9% in 2024 and 2025, respectively, against the 1.2% and 1.3% projected for the whole of the eurozone.
Portugal currently ranks 3rd EU country with the highest GDP growth for the last quarter of 2023: Click to see the full Portugal Business News report on the EU countries with the highest GDP growth.
About Portugal Business News
Portugal Business News is an English and French news site that specializes in promoting businesses in Portugal, both for the export market and for attracting Foreign Direct Investment, through writing news reports about the Portuguese economy and business environment.
News reports by Portugal Business News are referenced on flagship industry websites, on the Government of Portugal's investment portal AICEP Portugal Global, on the websites of leading research companies, on Wikipedia, and on multilingual news aggregators.
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