Economic trends
Since it joined the European Union in 1986, Portugal has enjoyed considerable economic progress mainly due to growing international trade with fellow member countries. From 2005, the country embarked on a policy of stabilization of public accounts, establishment of free-market reforms and dynamization of exports (market diversification especially towards Angola and China). However, Portugal was affected by the international financial crisis.
Since the beginning of 2009, Portugal has fallen into a deep recession because of the collapse of external demand and restrictive financial conditions which have affected all sectors of the economy, especially exports and investments. Growth dropped in 2009, while unemployment exceeded the 9% threshold. The State had to nationalize one of the country's major banks, the Banco Portugués de Negocio (website in Portuguese). Because of the increase in public expenditure aimed at supporting the economy, the budgetary situation deteriorated greatly in 2009. In the meantime, budgetary stabilization and structural reforms will be essential in order to improve growth prospects, reduce long-lasting unemployment and help reinforce the sustainability of public finances.
Main branches of industry
The agricultural sector is less mechanized than in most western European countries and as a result is less productive. Agriculture represents about 3% of the GDP. Main crops are cereal, fruit, vegetables and wine. Port wine exports represent 1.4% of total exports. Portugal has many natural resources. The mining sector (copper, tin) represents 6% of the GDP and Portugal is one of the main exporters of marble. The forests of Portugal provide a large portion of the world cork supplies.
The manufacturing industry is modern and is made up of small and medium-sized enterprises. Its main sectors of activity are metallurgy, mechanical engineering, textiles and construction. Moreover, the country has increased its role in the European automobile sector and has a world class mold manufacturing industry.
Services, particularly tourism, play a more and more important role. The tertiary sector contributes to more than 70% of the GDP.
International trade
Joining the EU has changed the structure of Portuguese imports and exports. The country exports more and more technological equipment, instead of traditional agricultural products or products from the textiles and clothing industry.
The EU is by far Portugal's main customer, followed by the United States.
Portugal showed a trade balance deficit in 2008 and 2009, but this trend should reverse itself from 2010.
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