Portugal

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Background of Economy

Portugal experienced many decades of relative poverty in rural and urban areas. Portugal's living standards have been increasing since the mid-1970s. Economic conditions improved after Portugal became a part of the EU and united its social policies with the Union's policies.[1] A 2010 estimate found the annual growth rate of Portugal to be 0.91%. Portugals average inflation rate in 2010 also, was roughly 1.2%. Their GDP in that same year was estimated to be 208 billion. As for their per capita GDP, that was noted to approximately 23,965 dollars. [2] The gini coefficient of Portugal was 38.5 in the year 2007.[3]

Economic Crisis

Despite being a small country, Portugal is optimistic about its economic situation. Portugal insists that it is different from that of Greece, who had fast GDP growth when credit was cheap which ultimately caused much of the economic drama in the euro zone to this day. Portugal's main issue with its economy is that it has experienced a steady loss of wage competitiveness, dating back to the 1990s, which ultimately contributed to weak GDP growth and a budget deficit that has averaged 4.6% of GDP in the past decade. [4]

To add to this problem, Portugal's foreign debt has been pushed to more than 100% of its GDP due to the cheap credit which also hurt Greece. This has caused Portugal's banks to be frozen from capital markets and forcing it be be heavily reliant on the European Central Bank. [5]

Portugal GDP

Portugalgdp.GIF [6]

References

  1. http://www.nationsencyclopedia.com/economies/Europe/Portugal-POVERTY-AND-WEALTH.html
  2. (2012) U.S. Department of State. Retrieved April 23, 2012 from http://www.state.gov/r/pa/ei/bgn/3208.htm
  3. CIA[1]
  4. http://www.economist.com/node/17902815
  5. http://countrystudies.us/portugal/64.htm
  6. http://www.tradingeconomics.com/portugal/gdp-growth
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