Portuguese economy climbs three places in IMD competitiveness ranking
The Portuguese economy climbed three places, to 39th, in the IMD world competitiveness ranking, led by Denmark, Ireland and Switzerland.
The Portuguese economy climbed three places, to 39th, in the IMD world competitiveness ranking, led by Denmark, Ireland and Switzerland, but fiscal policy and the labour market emerge as the country's worst rankings.
"Climbing three places compared to 2022, Portugal appears in 39th place in the study published by IMD's World Competitiveness Centre (WCC) [...]. Recovering from a fall of six places last year, the country is still three places below the result obtained in 2021 (36th)," the IMD said in a statement.
This assessment, which covers 64 global economies, is now led by Denmark, Ireland and Switzerland, with Singapore and the Netherlands rounding out the top five.
Portugal improved in two of the four key indicators. In the case of economic performance it moved from 46th to 42nd place, while in business efficiency it is now in 41st position, compared to 42nd last year.
However, in terms of government efficiency, it remains in 43rd place. In the score for infrastructure, the country drops two places (32nd).
According to the same note, Portugal stood out positively in sub-factors such as education (23rd place), social framework (24th), international trade (26th) and health and environment (27th).
In the opposite direction, the worst scores were in matters of fiscal policy (54th position), labour market (51st), business management practices (51st) and public finances (49th).
"Portugal's improvement in the overall rankings is largely due to its significant progress in terms of economic performance, notably in the sub-factors world economy and international trade. Portugal also performs well in some aspects of business efficiency, such as overall productivity, long-term growth of the workforce, the stock market index and the efficiency of the private sector's response to market opportunities and threats," said the WCC's senior economist, José Caballero, cited in the same statement.
In terms of challenges for Portugal, the study highlights the need to ensure growth of gross domestic product (GDP) above the European Union average.
Added to this is the need to develop a strategy to promote management skills, digital transformation and energy transition, as well as a cross-party agreement on strategies to address demographic issues such as ageing and low birth rates.
On the other hand, Portugal should "encourage reforms in justice, health, education and social security that can promote quality public services and reduce economic indebtedness".
The analysis also revealed that global levels of business confidence "are lacklustre", according to the results of an executive opinion survey of global competitiveness, one of the data items included in the report.
Risks of recession, economic slowdown, inflationary pressures and geopolitical conflicts outweigh concerns about environmental issues and climate change.
Countries that excel at adapting to unpredictability "tend to build resilient economies" or governments adapt policies "in a timely manner" in the face of economic conditions.
Countries with stable domestic energy production, strong supply chains and favourable trade balances have also managed to weather "the effects of turbulence in the global economy".
Inflation has also impacted on competitiveness scores, with countries with higher inflation rates losing ground to those with low inflation levels.
Take Latvia, for example, which fell from 35th place to 51st, mainly due to its deteriorating performance in terms of government and business efficiency.
The bottom five in this ranking are Brazil (60th), South Africa (61st), Mongolia (62nd), Argentina (63rd) and Venezuela (64th).
