Portugal poised to hit new investment record despite Brexit fallout

Portugal expects to hit a new investment record for export-focused projects this year, in the face of Brexit and global trade tensions, with authorities already scrutinising plans worth more than 1 billion euros.

The proposals submitted so far this year, the bulk of it being foreign investment, almost equals the record 1.17 billion euros of projects contracted in the whole of 2019, according to AICEP, the state agency that promotes investment and exports.

“The live pipeline is very strong, which is excellent news … and the AICEP will continue to raise more projects,” Luis Castro Henriques, the head of the agency, told journalists.

“Even after a second consecutive year of record highs, more than 1 billion euros of investments have been applied for in January. They are being analysed to be contracted in 2020, despite the various world uncertainties, which affect the decisions of companies.”

Export-focused projects involve those that provide goods or services to be exported from Portugal to other countries, rather than for domestic consumption, for example auto equipment or aircraft parts destined for German carmakers or European planemaker Airbus.

This year’s proposals include 13 new industrial projects, from automaking to chemical and pharmaceutical sectors, which have drawn an estimated global investment of 737 million euros. They also include 10 research and development (R&D) projects with a total investment of 276 million euros .

Castro Henriques said the accelerating investment testified to Portugal’s competitiveness gains over the past few years.

Exports and booming tourism supported Portugal’s economic and fiscal recovery after a 2011-14 debt crisis and bailout and, despite a slowdown last year, the country still outperforms the euro zone as a whole in terms of growth.

This year, the government expects to post the country’s first fiscal surplus in 45 years, of 0.2% of gross domestic product, while projecting growth at 1.9%, the same as in 2019.

Castro Henriques said foreign investment in Portugal was becoming more diversified, and coming from countries such as the United States, Qatar, the United Arab Emirates and Japan, in addition to more traditional sources such as Germany, France and Spain. More foreign money was also flowing into R&D, he added.