The Bank of Portugal has highlighted the "important contribution" of tourism exports to output and employment and to maintaining the economy’s capacity to finance growth.
According to a report by the Portuguese news agency Lusa, the analysis of recent developments in the tourism sector in Portugal is the highlight of the institution’s December economic bulletin, in which it downgrades its projections for growth in gross domestic product. It now sees GDP swelling 2.1% this year and 1.8% next– against government forecasts of 2.3% this year and 2.2% next– before slowing further to 1.7% in 2020 and 1.6% in 2021.
According to the bank, Portugal has been outperforming the global economy and that of southern Europe, with instability in rival destinations explaining part of that, but also the "improvement of perceived quality of service offered" by the country.
Thus, the document argues, "there is evidence of structural changes in the sector that should continue to sustain a strong growth of the projection horizon" (2018-20), among them the diversification of the provenance of foreign tourists, the geographic distribution of tourists within Portugal, and signs of lower seasonality.
On the supply side, it highlights the "strong increase in the capacity of tourist accommodation and the presence of low-cost airlines in the Portuguese market".
The bank concludes that although there are challenges, international comparison indicates scope "for an increase in tourism exports higher than the activity in the projection horizon, based on comparative advantages … in this sector."
Its projections point to continued, relatively strong, growth of tourism exports in the coming years, higher than projected for total exports of goods and services and for GDP, but lower than that recorded in 2017.
"The prospects for Portuguese tourism exports are anchored in the comparative advantages of the Portuguese economy in this sector and in the existing growth margin,” it states. “These positive perspectives are, however, subject to uncertainty and risk.”
