"That’s it folks!" Austerity in Portugal is over, according to an upbeat Economy Minister.
Caldeira Cabral claims that Costa's government "ended austerity" and that Portugal will have its biggest growth rate this century, claiming the socialist administration has “freed the country from austerity’s corset.”
In an interview with the Spanish newspaper El País, the Economy Minister said that Portugal's growing revenues have turned the country from a problem child into the poster boy of the European Union.
"We have put an end to austerity and we have adopted a moderate and responsible policy, we have returned income to the workers and pensioners ...the trust of the Portuguese and of investors has been reclaimed,” said Cabral.
Describing the positive moment of the economy, Caldeira Cabral pointed out that Portugal closed the first half of the year with GDP growth of 2.8%, which means that the country will end the year "with the highest growth of the century."
"Since 2010, the Portuguese economy has not had three consecutive quarters with growth above the Eurozone average," added the cheery minister who said that "investment grew 10% in the quarter, which guarantees the sustainability of growth, while exports increase at a faster pace than countries like the Netherlands and Germany, which are benchmarks of competitiveness.”
Investment and exports are lauded by the minister as engines of recovery, along with positive developments in the agri-food, footwear, textile and automotive sectors.
"Increasing our competitiveness was not at the expense of wage cuts - we raised wages, we are creating jobs and exports are rising," Cabral said, noting also the merits of Lisbon hosting the annual the Web Summit which attracted 60,000 people last November and brought hundreds of investors to the capital.
Cabral chose not to dwell on the appalling public debt level in Portugal, €249 billion at the end of July which sets a new Portuguese record.
Moody’s meanwhile, in its latest assessment of Portugal’s economy, kept the country’s credit rating unchanged at a 'junk' Ba1 rating but said the outlook was stable and was fairly optimistic.
As for investors suddenly being happy, this is far from the mark when it comes to the US where one view on Wall Street echoes the general feeling: "Everyone loves Portugal but most of us are loathe to do serious business there. The corruption at the top and the cooperation of government with the 'boys' doesn't encourage much trust."
However, the Brazilans have fewer qualms and its business leaders are quietly building up positions in Portugal due to security, tax incentives and Portugal’s position as a gateway into Europe.
According to senhorcabo.com, top Brazilian mining companies, coffee-roasting industries and leading brand factories recently "have settled in Portugal with investments that are creating jobs and stimulating the economy."
Middle class Brazilians are now the best individual buyers of property in the Lisbon area as they are arriving with wallets stuffed with money. While the feel good factor remains and the bigger picture is obscured by the government's PR flack, the socialists are set to do well in the local elections less than one month from now.
The Prime Minister already has stated that he will not be calling a general election to cash in on his popularity, mindful of Theresa May's disatrous early election mistake in the UK which has left her flapping like a fish on a slab.
