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Portugal & Spain

The Portuguese economy performed better in the first quarter of 2024 and exceeded the GDP growth forecast of 0.4% quarter on quarter, prompting the Bank of Portugal to revise growth expectations for 2024 and 2025 to, respectively, 2% and 2.3%. However, according to the recently-elected centre-right government, the economy will grow only 1.5% this year.

Although inflation in Portugal had been declining for a year, it went up again to 2.5%. In addition, the budget in the first quarter showed an unexpected deficit of Euro 259 million which has been attributed to the actions of the previous government.

The Spanish economy has continued to expand in 2024, with a 0.7% GDP increase in the first quarter. This growth has been supported by a strong tourism sector, a positive investment climate and a relatively high level of domestic consumption.

A strong economy attracts more qualified migrants (mostly from Latin America) and thus receives a further boost. Although the unemployment rate in Spain has fallen, its level of 11.8% is still one of the highest in the EU. Some positions are difficult to fill and a simplified visa procedure for highly-qualified professionals could solve this problem.

As for secondary raw materials, the overall market in Spain and Portugal is driven by material shortages. Prices are rising for aluminium and copper owing to a higher LME resulting from new sanctions against Russian material.