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Portugal faces emerging structural challenges

Friday, May 17, 2019

Subject

Outlook for Portugal.

Significance

Following four years of stable economic growth and budget deficit reduction, the Socialists will likely be re-elected as the largest party but again face the prospect of ruling without a majority.

Impacts

  • Spanish political and economic uncertainty will increase the attractiveness of Portuguese debt.
  • The right-wing Social Democratic Party's inability to recover support could lead to radicalisation within the party.
  • The government will push ahead with plans to build a second airport in Lisbon despite environmental groups' opposition.
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