Per capita growth declined steadily over the 2000s. Low productivity is at the root of a large income gap vis-à-vis the OECD average. Several structural bottlenecks are holding back productivity and a new wave of structural reforms is needed to raise the economy’s growth potential.
- Complete the implementation of zero licence procedures and undertake a comprehensive reform of territorial development legislation.
- Reduce the corporate debt overhang to facilitate re-source reallocation and rekindle investment.
- Improve the business environment by increasing competition in electricity, ports and professional services.
- Continue to scale-up vocational education and training, including in post-secondary education.
- Enhance innovation policies and strengthen the link between research and business.
- Reduce labour market duality to boost young people’s employment prospects, strengthen incentives to invest in skills and reduce labour market inequalities.
Source: OECD May 2017 Economic Outlook database.
Osório de Barros, G., F. Bento Caires and D. Xarepe Pereira (2017), "Zombie Companies in Portugal - The non-tradable sectors of Construction and Services", GEE Working Paper No. 88, GEE.
Fonseca, T., F. Lima and S. C. Pereira (2017), "Understanding productivity dynamics:a task taxonomy approach", GEE Working Paper No. 80, GEE.
Gonçalves, D. and A. Martins (2016), "The Determinants of TFP Growth in the Portuguese Manufacturing Sector", GEE Working Paper No. 62, GEE.
Pinheiro Alves, Ricardo (2017), "Portugal: A Paradox in Productivity", GEE Working Paper No. 70, GEE.
Dias, D., C. Robalo Marques and C. Richmond (2016), “Afetação de recursos em Portugal: comparação entre setores”, Revista de Estudos Económicos, Banco de Portugal, 2:1, pp. 31-50.
Arnold, J. and N. Barbosa (2015), "Structural policies and productivity: Evidence from Portuguese firms", OECD Economics Department Working Papers, No. 1259, OECD Publishing, Paris.
Amador, J. e A. Soares (2013). “Competition in the Portuguese economy: estimated price-cost margins under imperfect labour markets”, Working Paper Series, No. 8, Banco de Portugal.
Braguinsky, S., L. Branstetter and A. Regateiro (2011), “The Incredible Shrinking Portuguese Firm” , NBER Working Paper Series, No. 17265.
Cabral, L. and J. Mata (2003), “On the Evolution of the Firm Size Distribution: Facts and Theory”, American Economic Review, 93:4, pp 1075-1090.
Productivity - enhancing institutions