Portugal has fallen 13 spots to rank 77th in a list of the world’s most economically-free countries.
Included in a group of “moderately-free” countries alongside France, Italy and Japan, Portugal obtained an economic freedom score of 62.6 out of 100.
“Portugal continues to face challenges that require urgent economic policy adjustment,” according to the Economic Freedom Index, released on Wednesday (February 15) by USA’s conservative think tank Heritage Foundation.
The report says that since the new “anti-austerity” government led by António Costa took over in November 2015, “economic reforms have slowed causing friction with the European Union and International Monetary Fund.”
“Adherence to strict budgetary discipline had allowed Portugal to move beyond the worst of its economic crisis, but growth has slowed, and Portugal failed to meet the EU-mandated deficit reduction target. Unemployment is high, especially among younger Portuguese, many of whom have moved abroad for work.”
The report also says that Portugal’s “previous reforms, which had helped to modify and diversify the economy’s productive base, have lost their momentum.
“Despite sound institutional settings such as an efficient business framework and an independent judicial system, the indebted and inefficient public sector has worn away the dynamism of the private sector and reduced the economy’s overall competitiveness,” it adds.
Reform priorities include “reducing budget deficits that have elevated the level of public debt to more than 100 percent of GDP and enhancing the flexibility of the labor market. However, the pace of reform has slowed. The banking system remains weak.”
The index – which covers 10 freedoms from property rights to entrepreneurship in 186 countries – is led, for the 23rd straight time, by Hong Kong, followed by Singapore, New Zealand, Switzerland and Australia.