Portugal - Market OverviewPortugal- Market Overview
Mainland Portugal, along with the autonomous island regions of the Azores and Madeira, offers American exporters a market of approximately 10.3 million people in a country roughly the size of the State of Indiana. As a member of the European Union (EU) and the euro zone, it is fully integrated with the EU, uses the euro currency, and follows directives from the European Commission in Brussels. As with all EU countries, Portugal’s borders and ports are completely open to the free flow of trade with other EU member countries. Portugal has a politically stable environment with a democratically elected parliamentary government and is welcoming of foreign business and investment.
Portugal continued an upward trajectory in 2017, registering a record 2.7% growth and witnessing important declines in unemployment, which fell to 8%. In 2018, however, GDP growth decreased from 2.7 to 2.1%. Nevertheless, unemployment fell even further, to 6.8%. The structural reforms implemented since 2011 have created an economic and regulatory climate that is favorable to foreign investment which remains a priority for the Government with a focus on tourism, renewable energy, high quality industrial components, technology services, and value-added agricultural products.
U.S. Census data indicates that Portuguese consumers bought approximately $1.19 billion dollars’ worth of U.S. goods and services in 2017, a slight increase compared with 2016. In 2018, that number grew to approximately $1.46 billion. In that same period, U.S. imports of Portuguese goods and services grew from $3.5 billion, in 2017, to $3.88 billion in 2018. The top U.S. states exporting to Portugal are Louisiana, Texas, Pennsylvania, New Jersey, Kansas, California, Maryland, Indiana, New York, and Virginia. Top U.S. exports include transportation equipment, oil and gas products, agricultural products, and machinery parts.
The United States is Portugal’s largest trading partner outside the European Union. The total amount of U.S. goods sold into Portugal is likely higher than what the statistics reflect, as census data does not account for U.S. products imported into other EU countries and subsequently transported into Portugal for sale. It is common throughout the European Union for goods to be shipped to one EU location – often to take advantage of lower value added tax rates – and then to be distributed by ground transport to neighboring member state markets.
The United States continues to work closely with Portugal to find ways to expand and deepen two-way trade and investment to better reflect historically strong political, geo-strategic, and security ties between the two countries. Portugal’s continued drive to modernize and diversify its economy will offer possibilities for growth in U.S. trade and investment over the medium and long-term. Demand for high-quality, price-competitive U.S. products in Portugal is strong, and privatization of several large government-owned companies will provide additional opportunities for investment.