Transcript 2016 Economic Survey of Germany

OECD ECONOMIC SURVEY
OF PORTUGAL 2017
Boosting growth and well-being
6 February 2017, Lisbon
http://www.oecd.org/eco/surveys/economic-survey-portugal.htm
The economy is recovering
billion EUR
185
180
175
170
165
160
Real GDP
155
150
145
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: Calculations based on OECD Economic Outlook: Statistics and Projections (database).
2
The economy is increasingly more open
Evolution of exports of goods and services
% of GDP
100
90
80
Exports
Imports
Exports and Imports
70
60
50
40
30
20
10
0
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database).
3
Competitiveness has improved
Export performance
Index 2000 = 100
120
Portugal
Germany
Italy
Spain
110
100
90
80
70
60
2000
2002
2004
2006
2008
2010
2012
2014
Export Performance measures the expansion of a country’s exports relative to the expansion of import demand from its trading
partners. Improvements in export performance reflect rising market shares in the imports of trading partners.
Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database).
4
Unemployment is falling
Unemployment rate, %
20
15
10
5
0
2010
2011
2012
2013
2014
2015
2016
2017
Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database) and Banco de Portugal (2016),
“General Statistics”, BPstat (database).
2018
5
SOME VULNERABILITIES
REMAIN
Public debt is high
General government debt, Maastricht definition, per cent of GDP
150
140
130
120
110
Under current plans
100
Higher interest rate
90
Lower inflation
80
70
60
50
2000
2005
2010
2015
2020
Source: Calculations based on OECD (2016), OECD Economic Outlook: Statistics and Projections (database).
2025
2030
7
Corporate debt needs to be
brought down
Private sector debt1
% of GDP
190
Non-financial corporations
Households
170
150
130
110
90
70
2008
2009
2010
2011
2012
2013
2014
2015
2016
1. The non-financial sector debt presented includes loans, debt securities and trade credits. Household includes non-profit institutions
serving households.
Source: Banco de Portugal (2016), BPstat Database and ECB (2016), Statistical Data Warehouse, European Central Bank.
8
The banking sector remains
fragile
Ratio of capital to risk-weighted assets
Per cent, Q2 20161
30
Regulatory Tier 1
Regulatory
25
20
15
10
Source: International Monetary Fund, Banco de Portugal and European Central Bank.
SWE
IRL
GRC
NLD
SVK
CZE
OECD
BEL
CHE
DEU
POL
GBR
FRA
HUN
TUR
MEX
JPN
USA
ESP
ITA
PRT
0
KOR
5
9
Non-performing loans are high
NPLs as a percentage of total gross loans, Q2 2016
37
22
20
18
16
14
12
10
8
6
4
Source: IMF (2016), Financial Soundness Indicators (FSI Database), International Monetary Fund.
GRC
ITA
IRL
PRT
HUN
ESP
OECD
CZE
SVK
POL
FRA
BEL
TUR
NLD
MEX
DEU
JPN
USA
SWE
GBR
CHE
0
KOR
2
10
Corporates represent a high share of
NPLs
Share of non-performing loans, per cent
18
Non-financial corporations
16
Housing
Consumption
14
12
10
8
6
4
2
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Banco de Portugal (2016), BPstat Database and ECB (2016), Statistical Data Warehouse, European Central Bank.
11
Investment is weak
Total gross fixed capital formation
2000 Q1 = 100
160
140
120
100
80
Portugal
Spain
Italy
Euro area¹
60
40
2000
2002
2004
2006
2008
2010
1. Euro area countries that are also OECD members (including Latvia).
Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database).
2012
2014
2016
12
Start-up rates are low
Firms aged 0-2 years-old, as a % of all firms, latest data
14
12
10
8
6
4
Source: OECD DynEmp v.2 database; C. Criscuolo et al. (2014), “The Dynamics of Employment Growth: New Evidence
from 18 Countries”, OECD Science, Technology and Industry Policy Papers, No. 14.
TUR
GBR
NLD
USA
NZL
HUN
SWE
BEL
LUX
PRT
AUS
CHL
ESP
ITA
DNK
AUT
NOR
0
FIN
2
13
Young firms contribute more to
productivity growth
Average annual productivity growth, per cent, latest data
12
12
Young Firms
Other Firms
10
10
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
Labour productivity growth
Total factor productivity growth
Young firms are defined as those aged five years-old or less.
Source: OECD calculations based on data from Integrated System of Business Accounts (Sistema Integrado de Contas, SCIE).
14
Access to financing is the
biggest obstacle to investment
Index scale 1-10
8
7
6
5
4
3
2
1
0
FIN
SVK
NLD DEU AUT
FRA
BEL
EA
ESP
IRL
ITA
PRT
Source: ECB (2016), “Survey on the access to finance of enterprises (SAFE)”, Statistical Data Warehouse, European Central Bank.
GRC
15
SMEs are still too dependent on bank financing
Sources of investment financing for Portuguese SMEs,
Per cent of firms, first semester of 20161
Bank loan
Leasing or hire-purchase
Factoring
Other loans
Internal funds
Grants/subsidised bank loan
Other sources
0
2
4
6
8
10
12
14
16
18
20
“Internal funds” covers retained earnings or sale of assets. “Other sources” covers debt securities issued and equity investment .
Source: ECB (2016), “Survey on the access to finance of enterprises (SAFE)”, Statistical Data Warehouse, European Central Bank.
16
Additional reforms in the judicial
system are crucial
Days needed to resolve civil, commercial, administrative and other cases
2010
2014
1200
1000
800
600
400
PRT
ITA
FRA
ESP
SVK
LVA
CZE
SWE
FIN
SVN
NLD
HUN
POL
AUT
EST
0
DNK
200
Source: European Commission (2016), The 2016 EU Justice Scoreboard and Direcção-Geral da Política de Justiça.
17
The insolvency process is still too lengthy
Years required to resolve an insolvency case, 2015
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
IRL
JPN
CAN
SVN
BEL
FIN
NOR
AUS
DNK
ISL
GBR
AUT
NLD
DEU
NZL
KOR
ESP
USA
OECD
ITA
MEX
FRA
PRT
HUN
ISR
LUX
SWE
CZE
EST
POL
CHE
CHL
GRC
SVK
TUR
A. Years required to resolve an insolvency case
2015
Source: World Bank (2016), Doing Business 2016: Measuring Regulatory Quality and Efficiency (database) and APAJ (2015),
“Processo Especial de Revitalização”, Turn Analysis, No. 7, 2nd quarter, Associação Portuguesa dos Administradores Judiciais.
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
18
Barriers to competition in
transport sectors are high
Index scale of 0-6 from least to most restrictive, latest data
Air
4.5
Road
Rail
4.0
3.5
3.0
2.5
2.0
1.5
1.0
Source: OECD (2016), OECD Product Market Regulation Statistics (database).
TUR
PRT
FRA
KOR
POL
GRC
MEX
CZE
IRL
ITA
CHL
OECD
ESP
BEL
NLD
JPN
SWE
HUN
CHE
SVK
DEU
0.0
GBR
0.5
19
Electricity prices are high, hampering
competitiveness
EUR per thousand kilowatt hours paid by medium sized industrial consumers,
2015
Source: Eurostat (2016), “Electricity prices by type of user”, Tables by Themes.
20
RAISING SKILLS
Labour productivity is low
Gap with respect to the United States, per cent, 20141
40
40
20
20
0
0
-20
-40
-40
-60
-60
-80
-80
MEX
CHL
POL
KOR
TUR
EST
HUN
PRT
CZE
GRC
ISR
SVK
SVN
JPN
NZL
ISL
OCDE
GBR
UE
ESP
ITA
CAN
FIN
AUS
SWE
AUT
CHE
DNK
DEU
FRA
IRL
NLD
BEL
NOR
LUX
-20
Labour productivity is measured by GDP per hour worked.
Source: OECD (2016b), “GDP per capita and productivity levels”, OECD Productivity Statistics (database).
22
Improving skills is key
Percentage of working age population having attained at least upper secondary
education, 20151
1. Working age population: 25-64 years-olds.
Source: OECD (2016), Education at a Glance 2016: OECD Indicators.
CZE
SVK
EST
POL
CAN
USA
CHE
LVA
FIN
DEU
SVN
KOR
ISR
AUT
0
HUN
0
NOR
10
SWE
10
DNK
20
IRL
20
GBR
30
AUS
30
FRA
40
OECD
40
NLD
50
NZL
50
ISL
60
BEL
60
LUX
70
GRC
70
CHL
80
ITA
80
ESP
90
PRT
90
TUR
100
MEX
100
23
Learning outcomes are improving
Average of PISA scores in mathematics, science and reading
505
505
Portugal
OECD average
500
500
495
495
490
490
485
485
480
480
475
475
470
470
465
2000
2003
2006
Source: PISA 2015 Results: Excellence and Equity in Education (Vol. I).
2009
2012
2015
465
24
Early school leaving rate is high
Percentage of the population aged 18 to 24 having attained at most lower secondary
education and not being involved in further education or training, 2015
Source: Eurostat (2016), "Youth education and training", Eurostat Database.
SVN
CHE
0
POL
0
CZE
2
SVK
2
IRL
4
SWE
4
AUT
6
DNK
6
GRC
8
NLD
8
FIN
10
LUX
10
FRA
12
DEU
12
BEL
14
NOR
14
GBR
16
EU
16
EST
18
HUN
18
PRT
20
ITA
20
ISL
22
ESP
22
25
Grade repetition is too commonly used
% of 15-year-old students who have repeated at least one year
40
40
35
35
30
30
25
25
20
20
15
15
10
10
Source: OECD (2012), Equity and Quality in Education: Supporting Disadvantaged Students and Schools.
NOR
KOR
JPN
ISL
SVN
GBR
FIN
SVK
CZE
DNK
SWE
NZL
POL
EST
ISR
AUS
CAN
AUT
OECD
USA
ITA
DEU
NLD
0
BEL
0
PRT
5
ESP
5
26
Inequities in the education
system persist
% of PISA score variance explained by students’ socio-economic background
Portugal
OECD average
OECD minimum/maximum
35
30
25
20
15
10
5
0
2006
2015
Science
2009
2012
Reading
Mathematics
Source: PISA 2015 Results: Excellence and Equity in Education (Vol. I); PISA 2012 Results: What Students Know and Can Do
(Vol. I); PISA 2012 Results: Excellence Through Equity (Vol. II); PISA 2009 Results: Overcoming Social Background (Vol. II)
and PISA 2006, Vol. 2: Data.
27
The VET system needs a thorough
evaluation
Upper-secondary vocational education and training enrolment rates, 2014
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
CZE
FIN
AUT
SVK
NLD
SVN
CHE
LUX
BEL
ITA
NOR
AUS
POL
DEU
TUR
PRT
OCDE
SWE
GBR
FRA
DNK
ISR
LVA
MEX
EST
ESP
NZL
GRC
ISL
CHL
HUN
JPN
KOR
CAN
IRL
80
Source: OECD (2016), Education at a Glance 2016: OECD Indicators and OECD (2015), Education at a Glance 2015: OECD
Indicators.
28
Managerial skills remain low
Professional management is insufficiently used
7
Global competitiveness index ranging from 0 (non-professional) to 7 (professional management),
2014-151
7
6
5
5
4
4
3
3
2
2
1
1
0
0
ITA
HUN
GRC
SVN
PRT
TUR
MEX
POL
SVK
ESP
CHL
LVA
KOR
ISR
FRA
CZE
OECD
EST
AUT
ISL
JPN
LUX
DEU
AUS
CAN
GBR
BEL
SWE
USA
DNK
IRL
CHE
NLD
FIN
NOR
NZL
6
Source: World Economic Forum (2015), The Global Competitiveness Index Historical Dataset 2006-2015.
29
R&D expenditures are low
% of GDP, latest data
4.5
4.0
4.0
3.5
3.5
3.0
3.0
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
CHL
MEX
GRC
SVK
POL
TUR
NZL
ESP
LUX
PRT
ITA
HUN
EST
IRL
CAN
GBR
NOR
ISL
CZE
NLD
AUS
FRA
OECD
SVN
BEL
USA
DEU
CHE
DNK
AUT
SWE
FIN
JPN
ISR
KOR
4.5
Source: OECD, Main Science and Technology Indicators database.
30
Cooperation between SMEs and
research institutions is low
30
As a percentage of product and/or process-innovating small and medium sized
enterprises (SMEs), 2010-12
30
25
25
20
20
15
15
10
10
5
5
0
CHL ITA TUR LVA PRT ISR POL SVK FRA NLD ESP DNK CZE EST KOR DEU NORHUNSWEGBR JPN BEL GRC AUT FIN SVN
Source: OECD (2015), OECD Science, Technology and Industry Scoreboard 2015: Innovation for growth and society.
0
31
MAIN RECOMMENDATIONS
Macroeconomic Policies
• Maintain momentum for structural
reforms, in conjunction with a continuous
ex-ante and ex-post evaluation of reforms.
• Continue gradual fiscal consolidation to
ensure the decline of public debt without
jeopardising the recovery.
33
Recommendations to reduce NPLs
and the corporate debt overhang
• Strengthen current regulatory incentives for reducing
non-performing loans (NPLs), including through
write-offs and sales.
• Support the development of a market for distressed
debt, notably through the creation of asset
management companies.
• Improve the workings of insolvency rules by:
– reconsidering the privileged treatment of public creditors
– enlarging the scope for simple-majority decisions among
creditors
– shortening out-of-court settlement procedures.
34
Recommendations to improve the
business climate and raise investment
• Revise land use regulations and limit discretionary
powers of municipalities in licensing procedures.
• Ease entry requirements in professional services.
• Further reduce trial length and the backlog of pending
court cases by expanding court capacity and assigning
specialised judges to specialised courts.
• Phase out electricity generation guaranteed prices sooner
than currently planned.
• Improve the efficiency of ports.
Recommendations to raise skills
•
Perform a thorough evaluation of all vocational training programs.
•
Unify the different systems of vocational education by establishing a
single dual VET system, including work-based learning in companies.
•
Provide more and earlier individualised support to students at risk of
falling behind to reduce grade repetition.
•
Improve teachers’ training and shift more resources towards primary
and pre-primary education.
•
Strengthen the links between research and the business sector through
better incentives for academics to cooperate with industry.
•
Raise managerial skills by developing specific training courses for
managers.
•
Target life-long learning programmes towards the low-skilled.