The economic crisis that affects the entire world due to the Covid-19 pandemic is quite visible. Portugal and Europe were severely hit by this crisis, with GDP falling by around 7.6% and 6.8% in 2020, respectively (Eurostsat, 2020). Important sectors in Portugal such as tourism, restaurants or hotels were greatly affected, being forced to close their activities almost completely.
To respond to this recent crisis, the European Union (just like in the USA) approved a super multidimensional plan that supports and encourages the modernization of each national economy. Portugal was the first country to obtain the approval of the famous “European Bazooka“. About 14 billion are destined for the Portuguese economy, promoting and supporting Climate Transition projects (3,059 M€), Digital Transition (2,460 M€) and Resilience (11,125 M€). This plan, if correctly applied, will modernize the Portuguese economy (which has been stagnant for a few good years) and increment the much discussed and fundamental economic and environmental sustainability in the coming years.
However, the most recent political crisis provoked by the fall of the State Budget of 2022, jeopardizes the execution of the Portuguese Recovery and Resilience Plan. This crisis due to the lack of political understanding of the Left parties will have consequences on the execution of the plan as well as on economic growth next year, as reported by Oxford Economics analysts. The British consulting firm predicts the growth of Portuguese GDP to be 4.5%, instead of the previous forecast of 5.5% in 2022 with the State Budget rejected by the Assembly of the Republic.
Thus, the stimulus to the economy is compromised. Governance by duodecimals, the risk of a new government (which could be elected in the January legislative elections) that decides to renegotiate the PRR and the recent deterioration in the health situation caused by the SARS-CoV2 virus are reducing investment and consumption in Portugal. Certainly, the “alliance” of the sanitary and economic crisis with politics was the last thing Portugal needed now. Only after the legislative elections will we be able to have a better perspective of what is awaiting the Portuguese economy.
References
Varzim, Tiago. “Crise Política Vai Prejudicar A Economia Em 2022, Avisa Oxford Economics”. ECO, 2021. https://eco.sapo.pt/2021/11/05/crise-politica-vai-fazer-mossa-a-economia-em-2022-avisa-oxford-economics/
“Execução Da Bazuca Europeia Afetada Pela Crise Política É ″A Última Coisa De Que Precisávamos″”. DN, 2021. https://www.dn.pt/dinheiro/execucao-da-bazuca-europeia-afetada-pela-crise-politica-e-a-ultima-coisa-de-que-precisavamos-14299690.html
“Plano De Recuperação E Resiliência”. Recuperar Portugal, 2021. https://recuperarportugal.gov.pt/
Coelho, Miguel. ““Bazuca” Para Portugal. O Que Significa Isto, Agora? – Renascença”. Rádio Renascença, 2021. https://rr.sapo.pt/noticia/economia/2021/06/16/bazuca-para-portugal-o-que-significa-isto-agora/242728/

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