The economic growth registered in Portugal during the year 2017 exceeded expectations, reaching figures above the previously announced 2.6 per cent. The recently released data by the National Statistics Institute (INE) and Eurostat show the country's economic growth and compare it with the rest of Europe by revealing the strengths and weaknesses of this growth.
With regard to Portugal's rising economy in 2017, the highest growth since the year 2000 was recorded, which exceeds the expected figures from several institutions (putting the Gross Domestic Product - GDP - at 2.6 per cent). according to INE data, by overcoming the GDP figures the economy would grow by 2.7 per cent, with economic growth in the penultimate quarter of the year (2.5 per cent) and the last quarter of 2017 (in the order of 2 per cent, 4 per cent).
Part of the justification for these figures is based on net external demand, which refers to the difference between the export and import market - contrary to what occurred previously - it performed quite positively. The slight fall in GDP between the third and fourth quarters of 2017, however, can be justified by the slowdown in domestic consumption and also investment.
It is worth noting that Portugal's government budget, just like other major institutions such as the IMF, the Bank of Portugal, the European Commission and the OECD, predicted that the growth in 2017 would be 2.6 per cent. This was exceeded thus reaching the highest growth of the century at 2.7 per cent. This figure is even more favourable when considering the growth of the previous year, which, according to data released by the National Statistical Institute, was only 1,5 per cent (a figure that mainly came from the domestic economy).
Throughout the year 2017 there were several contributers to this growth. It is worth noting the role of tourism and the property market. Property investment in Portugal was revealed through expressive figures and rose by as much as 50 per cent compared to the figures in 2016. Markets were in clear expansion and they took advantage of the recent acclamation of Portugal as a safe destination, with an affordable cost of living - good quality of life and a perfect place for retiring in. All these factors have appealed to investors as well as the general public.
Data revealed by the National Statistics Institute showed that there was a growth of 20% just in the residential market alone, with a particularly intense demand from foreign investors.
Within the world of property brokerage, however, it is necessary to refer to the central role of the luxury housing market, which has contributed greatly to the favourable numbers of the overall growth in Portugal's economy. This sector has seen a marked improvement by reaching unprecedented numbers and making the premium segment one of the leading in the market. The increases registered in this sector were in the order of 10 per cent to 20 per cent, with a 30 per cent increase in the prices of several houses.
Once again, in the last quarters of the year and according to INE data, Portugal would enter the list of the top European countries with regard to its property market growth, presenting an increase of 10 per cent, which places our country in the same position as the Netherlands and slightly above Spain, with a property market growth of 7 per cent.
In overall terms, this improvement in the housing sector has shown itself in a wave of growth which, in addition to breaking records, it seems to be continuous. A possible rise in the economic situation to this sector is actually expected in 2018, and there is only one concern about the effects of price rises on the Portuguese middle-class families; their ability to buy property / make their mortgage or rent payments will be more difficult.
Despite the fears that are always associated with the INE figures and the changes in the financial scope of the housing market, the truth is that it is worth strengthening the role of this market in the growth of Portugal's economy in 2017. It should be noted that the role of investors who are mainly from countries such as Brazil, the United Kingdom, France and China, should be taken into account when obtaining such figures.