Summary
Competition from emerging Asia and other less developed countries is focused on these traditional markets. [...] countries in Eastern Europe and elsewhere are now producing medium- and higher-technology goods and the Portuguese economy faces an uphill struggle unless it can implement broad-based reforms aimed at liberalising key sectors (such as services and telecommunications), as well as making labour markets more flexible. * Inflationary pressures have not been particularly subdued, despite the sizeable negative output gap.
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Extract
Portugal
Highlights and Key Issues
* We expect GDP to fall by around 1 .9% this year after growth of just 0.3% in 2008, with domestic demand contracting sharply over the next few quarters. As elsewhere in the Eurozone, confidence indicators in Portugal have plunged in recent months and our forecast now shows investment dropping by nearly 8% this year.* With the economy in recession, welfare spending increasing and the government's recently announced measures to boost the economy worth euro2.2...See the full content of this document