Can Portugal Remain the Eurozone's Anomaly?

Oct 16, 2019 | 09:00 GMT

In this photo, Portuguese Prime Minister Antonio Costa speaks to the press after meeting with President Marcelo Rebelo de Sousa in Lisbon on Oct. 8, 2019.

Portuguese Prime Minister Antonio Costa speaks to the press in Lisbon on Oct. 8, 2019, two days after his Socialist Party won the most seats in Portugal's parliamentary elections, but fell just short of a majority.

(HORACIO VILLALOBOS/Corbis/Getty Images)


  • Portugal's economy will continue to grow in the coming years, but at a slower rate.
  • The reelected government's left-wing allies will push for the reversal of some austerity measures, which could make the country less attractive to investors.
  • Spain's economic slowdown, along with rising U.S.-EU trade tensions and a potential no-deal Brexit in the weeks ahead, also risks creating headwinds for Portuguese exporters.

In the wake of the eurozone financial crisis in the early 2010s, an informal alliance of left-wing forces in Portugal unexpectedly managed to not only stabilize the country's battered economy, but also to make it more attractive to foreign investors. And Portugal's Oct. 6 general election has since confirmed its place as a European anomaly of sorts, with the government winning reelection on a continent where nationalist and right-wing parties are on the rise. But despite Portugal's strong economic performance in recent years, public and private debt remains high. And the reelected government's left-wing allies in parliament will likely demand a reversal of some of the austerity measures implemented during its first term. And this, combined with mounting global trade uncertainty, will challenge Lisbon's ability to sustain Portugal's robust growth throughout its second term....

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