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Business confidence in doubt

BUSINESS CONFIDENCE among Portuguese businessmen continues to be unstable according to the Commission for European Economic Affairs.

According to this organisation the feeling across the board towards a slow, but gradual, return to economic growth and confidence was more grey and uncertain than has been previously suggested in national economic statistics published earlier this month by the Portuguese National Statistics Institute (INE).

The Commission’s report points to a general downturn in the market climate in Portugal, particularly in industry and services, which represent around two thirds of the total wealth created in the country.

In September, the INE reported that the economic climate in Portugal was clearly in recovery in the industrial, electrical transformer, commercial, retail and construction sectors, which had all shown signs of moderate and sustained growth for the fourth consecutive month.

The INE also stated that the general return of confidence among businesses was at its best level since September 2004. However, the Brussels-based commission has predicted a sharp fall in orders in the transformer industry.

The reports from the Commission for European Economic Affairs and the INE reveal that there continues to be substantial doubts as to the reality and strength of Portugal’s overall recovery, particularly given high oil prices, the unstable geopolitical situation in the Middle East, increases in interest rates and the government’s ability to maintain its consolidation of the country’s budget deficit.