Consumer confidence in Portugal at 17-year high

Spring is not simply in the air, it’s in people’s steps. National statistics institute INE has just reported that “consumer confidence” is at a 17-year high following the Bank of Portugal’s upward review of the national economic recovery. Growth is increasing (finance minister Mário Centeno has told Bloomberg it could reach 2% this year), unemployment is markedly down (forecasts are for levels to drop below 10%) – and investors are stacking up
on the horizon.

Confidence began to bubble last September, reports TVI24 – stressing this is the first upward sign since the height of the austerity years in 2013, and the “highest upward trajectory since March 2000”.

The boost is a combination of Portugal’s latest economic ‘good news’ and the way it is seizing opportunities from everywhere it can.

Whether it is the Golden Visa scheme, the Non-Habitual Residency Regime, the new ‘task force’ purportedly mobilised to lure businesses fleeing the consequences of Brexit, the country is suddenly becoming pro-active to the point that politicians are finally saying “it is time to start investing in prospects for the country’s youth” – a dwindling sector that only a few years ago was advised by former prime minister Pedro Passos Coelho to “seek opportunities elsewhere”.

As the weather too finally shakes off the winter gloom, the Resident has been out on the streets of Portimão to see whether new-found optimism has filtered through to what was one of the worst affected boroughs during the height of the crisis.

In the panel, answers show only one positive comment, from the youngest person interviewed – suggesting optimism is truly the saving grace of youth.

But elsewhere, we had the opportunity to talk to one of the three business brains harnessed for the new “Portugal In” initiative – an inspired temporary structure set up to capture foreign investment, and reporting directly to prime minister António Costa himself.

Chitra Stern is an Algarve success story. The dual Singapore-British national arrived in Portugal with husband and business partner Roman 15 years ago. They ‘fell in love’ with Sagres and the potential they could see in what was then a pile of rocks on a semi-deserted beach.

The Martinhal Hotel Group has since grown – despite some “very tough years” during the financial crisis – from Martinhal’s thriving family resort in Sagres to sister businesses in Cascais, Quinta do Lago and Lisbon.

Along the way the seemingly tireless mother-of-four has picked up a variety of awards for business acumen, not least an Accomplished Entrepreneur accolade from the London School of Business.

She tells us that it was probably the fact that she brings a “foreigner’s mindset to the table” that won her a role in “Portugal In”, along with her understanding of Asian as well as European cultures.

Working alongside former tourism minister Bernardo Trindade and Porto businessman Gonçalo da Gama Lobo Xavier, the group’s brief is to help Portugal’s economy grow “in a sustainable way”.

Although billed as a vehicle to pack onboard businesses fleeing Brexit, Stern told us: “The objective goes beyond Brexit and firms that want to relocate because of Brexit.

“The wider objective is to work with existing structures within the government that have been working hard on attracting foreign direct investment, and for companies to set up in Portugal to go even further.

“The mission hopes to help with this long-term strategy – but with some attention to companies that want to relocate because of Brexit.

“The work that all the other departments and agencies that are already working on this topic of bringing in direct foreign investment cannot be underestimated,” she added.

“The PortugalGlobal network (set up by government agency AICEP), the Golden Visa programme, the Non-Habitual Residency scheme – all this has been built over years by the government as a whole (with the hard work of various governmental departments).

“We will merely be complementing all this work,” she said, adding that the initiative had its first official meeting on Monday, and “will continue to meet in different parts of the country. More to follow…”

And it is here that one realises the undercurrent of positivity and good energy that will inevitably gather people up as it grows.

Stern, too, had words for perennial critics of Portugal’s ‘bureaucracy’ and customary bleats about how ‘difficult’ it can be for foreigners to set up businesses here:“I don’t believe that there is more red tape here than other places … Perhaps different red tape,” she said.

“We have only had positive experiences of working closely with different entities and stakeholders.

“We have grown our business to four hotels and we are still growing.

“Every country one moves to, one has to understand the ‘lay of the land’ and its particular business culture. The point is that being part of the EU has brought a lot of progress in Portugal and standards exist here that apply all across the EU.

“AICEP, as a trade and investment agency, has been fantastic over all these years. We have worked closely with such entities, as well as governmental departments, local town halls etc. to realise our business objectives.
“People need the patience and knowledge to find out how things work locally, and there are professional firms to help.”

Stern is clearly one of the growing number of optimists, stressing that “Portugal has huge potential. It is the California of Europe where the lifestyle is great.

“Web Summit came to Lisbon last year and there are now start-ups mushrooming around the city, especially with co-working spaces such as Second Home and Village Underground.”

That is the second time this week we’ve heard of the popularity of co-working spaces (see story on page 6) and how they are attracting investment.

With Portugal’s PS government being hailed in the international press as a phenomenon (see story on page 8) that has managed to turn a depressed country’s fortunes round in just 18 months, spring is most definitely in the air.

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Photo: Albufeira