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Portugal ranks 8th place among the most attractive economies in the European Union

Portugal ranks 8th place among the most attractive economies in the European Union
Aicep Portugal Global · 11 Jan 2021
This year's edition of the EY Attractiviness Survey Portugal shows that the number of Foreign Direct Investment (FDI) projects in Portugal reached, in 2019, a record of 158, more than doubling the value of the previous year. Portugal rose to 8th place among the most attractive economies in the European Union for foreign investors, more than doubling its share of projects (from 1.2% to 2.5%). The number of jobs created (more than 12,000 in total) followed the same trend.

The study indicates that in a year marked by uncertainty and escalating tension in world trade, Portugal managed to diversify the origin of FDI and attract highly qualified geographies such as the United States, which in 2019 were the main investor market in Portugal, followed by Germany and France.

2019 saw widespread growth, with all sectors maintaining at least the same level of FDI intentions. The Digital area reinforced its leadership position in terms of attractiveness, practically tripling the number of projects (from 15 to 42).

The EY Attractiviness Survey Portugal shows that the emergence of COVID-19 is having a strong impact on FDI projects announced in 2019 across Europe. However, Portugal shows some signs of resilience, with an estimated 20% of the projects announced in 2019 being at risk, compared to the European average of 35%.

The exceptional period of great uncertainty will have an impact on the economy and investment that will extend beyond the short term. Portugal's attractiveness will depend on strengthening its strongest assets (e.g. infrastructure, available talent, quality of life) and improving its less attractive points. This year's Survey points in that direction, showing an improvement in investor perceptions in some areas such as labor legislation or the support of local authorities.

The same study shows that despite current circumstances, Portugal may see its long-term attractiveness reinforced, as the pandemic accelerates some ongoing megatrends, digitization of the economy and technological acceleration; greater weight of sustainability and climate change issues in investment decisions; reconfiguration and closer proximity to supply chains.

In this regard, geographic location, transport and digital infrastructure, digital appetite for the economy and natural resources in the area of ​​renewable energies may be important catalysts for strengthening Portugal's international position for FDI.