Portugal joined the European Union in 1986
Capital city: Lisbon
Population: 10,707,924 (July 2009 est.)
Currency: Euro
Language: Portuguese
Portugal has become a diversified and increasingly service-based economy since joining the European Community. Over the past two decades, successive governments have privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. The country qualified for the European Monetary Union (EMU) in 1998 and began circulating the euro on 1 January 2002 along with 11 other EU member economies. Economic growth had been above the EU average for much of the 1990s, but fell back in 2001-08. GDP per capita stands at roughly two-thirds of the EU-27 average. A poor educational system, in particular, has been an obstacle to greater productivity and growth. Portugal has been increasingly overshadowed by lower-cost producers in Central Europe and Asia as a target for foreign direct investment. The budget deficit surged to an all-time high of 6% of GDP in 2005, but the government reduced the deficit to 2.6% in 2007 - a year ahead of Portugal's targeted schedule. Nonetheless, the government faces tough choices in its attempts to boost the economy, which declined 0.1% in 2008, while keeping the budget deficit within the euro-zone 3%-of-GDP ceiling.
GDP - composition by sector
agriculture: 2.8%
industry: 25%
services: 72.2% (2008 est.)
Source: CIA
