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Whenever I speak to friends and relatives in the UK at the moment, I am asked about the Portugal economy. Usually what is said is something along the lines of “oooh, isn’t Portugal in trouble at the moment?”
Given that Portugal is staging a nationwide general strike today, I thought it appropriate to add a quick post about the economy of Portugal.
Workers all over the country are striking in protest about spending cuts. As I have spent the whole day working indoors, I can’t tell you first-hand about the ground-level impact, but I have noticed that the bells on the nearby level crossing haven’t been ringing very much, with I guess means the trains aren’t running, and a quick check of the website for Faro airport indicates that most flights have been cancelled.
I only take a passing interest in politics, but from what I understand, the strikes seem rather futile, as the cuts and budget the ruling socialist government is proposing is not going to be blocked by the opposition anyway, when the vote takes place this Friday.
In terms of how Portugal feels on a day to day basis, the impact of the recession, as far as I can see, hasn’t been felt quite as hard as it had when we lived in the UK. The simple fact is there has never been a vast amount of money around in the Portugal economy at the best of times, and masses of citizens were already migrating to other countries in order to find work.
Where you can see the direct impact of the recession is in the vast quantities of unsold apartments and unfinished developments. My (admittedly uneducated) view is that something has to give in this respect, and all that can happen is that prices will eventually have to be lowered to more realistic levels. There is only so long developers can sit on unsold properties whilst struggling to pay electricity bills for common areas and lifts in apartment blocks—something that you hear about all the time.
So for us, all of this drama has a (thankfully) limited impact, aside from the fact that the constantly fluctuating exchange rate means it’s hard to predict what our English income is going to be worth each month.
Will Portugal end up going cap-in-hand for a bail-out? I don’t understand nearly enough about the economy in Portugal to even guess. The media here seem to view it as less likely that the English press, but then only weeks ago people were convinced it wouldn’t happen to Ireland. We just have to wait and see.