Lisbon (Jo Kassis - Pexels)
Lisbon - Photo: Jo Kassis - Pexels

Companies fear unstable governance and fall in consumer confidence

Fears are fuelled by a fall in internal consumption, a higher cost of living, a fall in exports, among others

Confidence among companies and businesses is not strong for 2024, according to a survey undertaken by the Enterprises of Portugal Association (Associação Empresarial de Portugal, AEP), among its 953 members.

Regarding the economy, companies fear a fall in internal consumption fuelled by overseas geo-political uncertainty and possible recession at home after Prime Minister António Costa resigned and the Portuguese President decided to dissolve parliament and call election for March 10.

Fears are fuelled by a fall in internal consumption, a higher cost of living, a high tax burden on labour and profits, a fall in exports, lack of qualified labour and the high cost of raw materials, credit (due to high interest rates) and high energy bills.

At an international level, “an uncertain and unstable situation, with a negative impact on overseas demand, particularly from Europe – Portugal’s main export market — also played into concerns among the companies canvassed.

In the survey, 70% of companies quizzed considered a fall in internal and overseas demand as “significant or very significant”.

Some 59% believed that next year would have the same level of business as this year, but 38% thought the fall in exports and internal demand would be greater than in 2022.

On the other hand, there is a lesser proportion of companies believing that there would be an increase in business has fallen from 41% to 30%.

However, the vast majority of companies questioned do not expect to have to lay off staff in 2024.

Source: Essential Business