Dossiers Económica

Conjuntura dossiers Económica

Portugal: 2016 in Review Economic Outlook Conjuntura Económica

Portugal: 2016 in Review

Index / Índice

I. 2017 Forecasts…………………………………………………………………………………………………………………………………………... 3

II. Main figures of 2016…………………………………………………………………………………………………………………………………. 6

III. Financial System ………………………………………………………………………………………………………………………………….…... 9

IV. Business Climate …………………………………………………………………………………………………………………………...... 11

V. Key Political Developments …………………………………………………………………………………………………………………...... 13

VI. Portuguese people with international recognition ………………………………………..……………………………………….. 15

VII. Head of State and Head of Government official visits…………………………………………………………………………..… 19 23 VIII. Main Economic Data ……………………………………………………………………………………………………………………......

IV. More About Portugal ……………………………………………………………………………………………………………………………… 24

Portugal: 2016 in Review

I. 2017 Forecasts

Economic growth is expected to increase in 2017

The Government will continue applying its policy to recover the incomes of Portuguese households

The main national and international institutions foresee an acceleration of economic growth, with particular emphasis on the positive evolution of investment. Public accounts are also expected to continue to improve, as will the unemployment rate. The minimum wage will increase to 557 euros (7 798 euros annually), with effect from 1 January. During 2017, local government elections will be taking place in Portugal, Pope Francis will be attending the celebrations of the Centenary of the Apparitions of Our Lady of Fátima, and Lisbon will once again be hosting the Web Summit, this time expecting to welcome more than 80 000 participants.

Portuguese Economy Official Forecasts for 2017 Institution¹ MF PPFC BdP EC IMF OECD Real GDP and components (% change) Real GDP 1.5 1.3 1.4 1.2 1.3 1.2 Private consumption 1.5 2.0 1.3 1.1 1.3 1.2 Public consumption -1.2 0.1 0.0 0.4 0.6 0.2 Investment (GFCF) 3.1 2.9 4.4 3.7 2.5 0.7 Exports 4.2 3.8 4.8 3.7 3.6 3.7 Imports 3.6 4.0 4.8 4.1 3.4 3.6 Contribution to growth (p.p.) Internal demand 1.3 1.5 0.5 1.4 1.4 - Net external demand 0.2 -0.2 0.9 -0.1 0.0 - External sector (% GDP) Net lending 2.2 1.3 0.9 2.0 - - Labor market (% change) Employment 1.0 0.9 1.0 0.7 1.0 - Unemployment rate (% labour force) 10.3 10.7 10.1 10.0 10.6 10.1 Prices GDP deflator 1.5 1.1 - 1.7 1.4 0.9 CPI/HCPI 1.5 1.0 1.4 1.2 1.1 1.1 Public finances (% GDP) Budget balance -1.6 -2.6 - -2.2 -2.1 -2.1 Primary balance 2.8 - - 2.2 2.3 - Gross public debt 128.3 - - 129.5 129.9 129.5 ¹ - MF – Ministry of Finance, PPFC – Portuguese Public Finance Council, BdP – Banco de Portugal (Portuguese Central Bank), EC – European Commission, IMF – International Monetary Fund, OECD – Organisation for Economic Co-operation and Development.

Portugal: 2016 in Review

I. 2017 Forecasts

The official forecasts for the Portuguese economy in 2017 from the most relevant institutions are fairly homogenous and predict a slight increase in economic growth. Regarding the components of GDP, the Ministry of Finance is the only institution foreseeing a negative change in public consumption. The Portuguese Public Finance Council and the European Commission anticipate a higher growth in imports than that in exports; therefore, for those institutions net external demand will make a negative contribution on growth. All institutions expect a positive change in investment, an increase of employment, the continuous decline of the unemployment rate, and an improvement in the budget balance and also in gross public debt as a percentage of GDP.

The Troika taskforce made up of members from the European Commission, the European Central Bank and the International Monetary Fund (IMF) will continue to carry out Post-Programme Monitoring discussions in Portugal within the framework of the Economic Adjustment Programme, and two more visits are planned for 2017. Due to the European rules, the Post-Programme Surveillance will continue until Portugal reimburses at least 75% of the borrowed funds. With regard to the IMF, the missions are undertaken as part of regular consultations under Article IV of the IMF's Articles of Agreement in the context of Portugal’s request to use IMF resources on its bailout in 2011. Portugal will be monitored until its outstanding debt is less than 200% of its respective share of contribution to the Fund. Local government elections will be held in Portugal during 2017. The President of the Republic Marcelo Rebelo de Sousa has not yet set a date but the election of local authorities is expected to take place between September and October. The mandates last four years, and in terms of the official candidates to the most important municipalities known so far, only the President of the CDS-PP party Assunção Cristas has announced she will run for the Lisbon City Council. As it stands at the moment, it is expected that the current mayors of Lisbon and Porto, Fernando Medina and Rui Moreira, respectively, will run for re-election.

The State Budget for 2017 introduces a series of relevant changes in the lives of the people living in Portugal. The minimum wage will rise to 557 euros (7 798 euros annually) with effect from 1 January, a measure that will be compensated by the reduction from 23.75% to 22.5% of the Single Social Security Rate (TSU) paid by companies. The Government will continue applying its policy to recover the incomes of households by gradually eliminating the personal income surcharge throughout the year, increasing the lower pensions, updating the social support index, reintroducing the income support allowance, increasing the family allowance, and by reinstating public servants wages. With regard to the tax system, the 6% VAT charged on public transport passes for any member of the household is now deductible on the personal income tax up to a maximum of 250 euros. In terms of social protection, the Government will move forward with the provision of free school textbooks to all primary school students and universal preschool education, as well as the strengthening of the primary care network, extending access to the family doctor to 500 thousand additional users. To provide support to businesses, the Government has extended until the end of 2017 the corporate tax benefit for job creation for youth and the long-term unemployed. It has also reinforced the investment benefits by doubling the ceiling from 5 to 10 million euros of the eligible expenses deductible in corporate taxes. The Government is also introducing the Semente Program (Seed Program) to encourage entrepreneurship by allowing a deduction on personal income tax of 25% of the investment made in startups as a way to attract small investors.

Portugal: 2016 in Review

I. 2017 Forecasts

Within the framework of the monetary policy, the European Central Bank (ECB) announced at the last meeting that it will extend the programme for the purchase of securities until at least December 2017 (previously expected to end in March), while reducing the monthly purchase limit from 80 billion euros to 60 billion euros. Given the importance of the ECB in the secondary public debt market, these measures will surely affect the financing costs that Portugal will have during the funding rounds in 2017. The ECB has also announced that it will maintain the main rate for refinancing operations at 0%, the deposit rate at -0.4%, and the marginal lending rate at 0.25%.

According to the press, Portugal will celebrate the next 10th of June, the Day of Portugal, Camões and the Portuguese Communities, in Portugal and in Brazil. Due to the different time zones, the celebrations will start off in Porto and move on to Rio de Janeiro and São Paulo where they will end the following day. Prime Minister António Costa will accompany the President of the Republic Marcelo Rebelo de Sousa on this visit, and they will be hosted by the President of Brazil, Michel Temer.

With regard to main events, a special highlight to the celebration of the Centenary of the Apparitions of Our Lady of Fátima, with the confirmed presence of Pope Francis on 12th and 13th of May 2017. Pope Francis will be the fourth Head of the Catholic Church to visit the Sanctuary of Fátima, following Pope Paul VI (1967), John Paul II (1982, 1991, and 2000) and Benedict XVI (2010). Portugal will participate in three major NATO operations in the Mediterranean, Lithuania and Romania. The city of Lisbon will be the Ibero-American Capital of Culture in 2017, and it will also be hosting the Web Summit once again, between 6th and 9th November. Founder Paddy Cosgrave said that he plans to expand next year's summit to 80 000 participants. The next edition of the EuBea - European Best Event Awards, a meeting that annually distinguishes the best events held in Europe, will take place in Porto in November. Peniche will once more stage the Meo Rip Curl of the World Surf League, from 17th to 28th October. The northern part of Portugal will hold another edition of the Rally de Portugal between 19th and 21st of May, a round of the World Rally Championship (WRC). Portugal has already secured 41 new international congresses for 2017. The National Soccer Team, as European Champions, will play the Confederations Cup in Russia for the first time and will also play the qualifying round for the 2018 World Cup.

Portugal: 2016 in Review

II. Main Figures of 2016

Third quarter GDP rose by 1.6% compared with last year’s figures

The trade balance recorded a year-on-year improvement in the second and third quarters

In the third quarter, the unemployment rate was set at 10.5% and employment showed an upward trend. The public deficit up to November registered an improvement of 393.8 million euros, standing at 2.5% of GDP, falling from the 3.4% registered in the same period of 2015. Portuguese Economic Data of 2016 According to the economic data available so far, GDP grew by 1.6% year-on-year in Quarter Q1 Q2 Q3 the third quarter, higher than in previous Real GDP and components (y-o-y % change) quarters. After growing less than imports Real GDP 0.9 0.9 1.6 in the first quarter, exports recorded a Private consumption 2.5 1.6 1.9 year-on-year change higher than imports Investment (GFCF) -2.7 -2.4 -1.5 in the second and third quarters, which Exports 3.4 1.8 5.4 resulted in a positive contribution to growth of the net external demand in Imports 4.7 1.4 3.5 these quarters. The unemployment rate Contribuições para o crescimento (p.p.) has been dropping, having reached 10.5% Internal demand 1.6 0.8 0.9 in the third quarter, and employment has Net external demand -0.6 0.1 0.7 been rising steadily. Inflation remained Labor market (y-o-y % change) low and below 1%, recording the lowest Employment 1.1 0.8 2.2 value in May with 0.3% year-on-year Unemployment rate (% labour force) 12.4 10.8 10.5 change, and the highest in October with 0.9% year-on-year change.

From January to November 2016, the general government balance showed a deficit of 4 335.8 million euros, and a primary positive balance of 3 645.7 million euros. This represents a year-on-year general government balance recovery of 393.8 million euros. Such improvement is due to the 1.9% rise in revenue being higher than the 1.3% increase in expenditure.

Portugal: 2016 in Review

II. Main Figures of 2016

Portuguese State offered 11 medium and long-term, and 21 short-term debt issues. In the medium and long- term, a 21-year treasury bond was issued in October, recording a weighted average yield of 3.2%. Four 10- year treasury bond auctions were held in March, May, July and August, with the corresponding weighted average yields ranging from 3.03% to 3.25%. There were also six 5-year issues, with the lowest average yield of 1.75% recorded in October, and the highest of 2.1% in November.

The short-term issues

auctioned by Portugal were six 1-year, four 11-month, six 6- month, and five 3-month treasury bills. The first 2016 issue of 1-year treasury bills had a weighted average yield of -0.001%, while the last had 0.005%. As for the 6-month issues, the first weighted average yield was -0.013% and the last one was -0.027%. The three-month treasury bills had Source: Portuguese Treasury and Debt Management Agency (IGCP) 0.008% weighted average yield on the first issue and 0.0012% on the last. In the secondary market, the 10-year government bonds closed the session with a yield of 2.52% on 1 January 2016, and of 3.76% on 30 December. The yield of the 5-year bonds was 1.14% on the first day and 1.90% on the last, and for the 2-year bonds the yield was 0.14% on the first day and 0.39% on the last. The lowest yields in 2016 for the 10-year, 5-year and 2-year government bonds were recorded in January, with 2.51%, 1.14% and 0.12%, respectively, and the highest of 4.11%, 2.38% and 1.12% were registered in February. This peak was due to the risk, at the time, of downgrading the Portuguese rating to "junk" by the only agency that maintains the country above this rating. The cut by DBRS would restrict the European Central Bank's purchase of public debt, which requires at least one of the four agencies to grade the rating higher than "junk".

Portugal: 2016 in Review

II. Main Figures of 2016

Forecasts for GDP growth in 2016 are slightly lower than in 2015 (1.5%), largely due to the negative variation in the investment component and in the net external demand indicator. By the end of 2016, net lending is expected to be positive and employment is predicted to increase. The Ministry of Finance foresees a budget deficit of 2.4% of GDP, 0.1 p.p. below the target of 2.5% set in the State Budget for 2016.

On 23 December, INE - Statistics Portugal released the third quarter government balance in national accounts (the relevant criteria for the European Commission), stating that in the three quarters of 2016, the government deficit stood at 2.5%, falling from the 3.4% registered in the same period of 2015. This result is aligned with the European Commission annual target, and if it materializes, this will allow the country to exit the Excessive Deficit Procedure during 2017.

Portuguese Economy Official Forecasts for 2016 Institution MF CFP BdP CE FMI OCDE Real GDP and components (% change) Real GDP 1.2 1.0 1.2 0.9 1.3 1.2 Private consumption 2.0 2.1 2.1 1.8 2.0 2.0 Public consumption 0.6 0.2 1,0 0.6 0.6 1.1 Investment (GFCF) -0.7 -0.3 -1.7 -1.4 -1.4 -2.0 Exports 3.1 3.7 3.7 2.8 3.5 3.3 Imports 3.2 3.8 3.5 3.3 3.1 3.6 Contribution to growth (p.p.) Internal demand 1.3 1.5 0.4 1.1 1.2 - Net external demand -0.1 -0.2 0.8 -0.2 0.1 - External sector (% GDP) Net lending 1.7 1.2 1.1 1.6 - - Labor market (% change) Employment 0.8 1.2 1.5 1,0 1.4 - Unemployment rate (% labour force) 11.2 11.4 11.0 11.1 11.0 11.0 Prices GDP deflator 2,0 1.1 - 1.8 1.6 1.5 CPI/HCPI 0.8 1.0 0.8 0.7 0.7 0.7 Public finances (% GDP) Budget balance -2.4 -2.7 - -2.7 -2.6 -2.5 Primary balance 1.9 - - - 1.9 - Gross public debt 129.7 - - 130.3 130.8 130.2

Portugal: 2016 in Review

III. Financial System

In 2016, the volume of non-performing loans continued to be one of the main challenges of the banking system

The conclusion of the process of the sale of Novo Banco and the takeover bid of BPI postponed to 2017

The topic of the challenges, risks and vulnerabilities of Portugal’s financial stability continued to be widely discussed during the year 2016. Among the main risks associated, the persistence of high volumes of non- performing loans remains one of the main topics discussed, despite its positive evolution. The year is also marked by significant changes in the state-owned bank (CGD) and in the main private banks.

In May of 2016, national and international decision-makers representing the entities that directly affect the Portuguese banking sector in what concerns legislative, regulatory, supervisory, and bank management issues attended the conference held jointly by the Portuguese Banking Association (APB) and the TV channel TVI titled “The Present and Future of the Banking Sector”. All the speakers addressed the current state of the banking system, explaining the main problems encountered and pointing out the major challenges awaiting in the future. They also presented proposals regarding what must be done in order to strengthen financial stability. The Governor of the Portuguese Central Bank (Banco de Portugal), Carlos Costa, described the state of the banking system in 2010 as the starting point in the context of the problems that were encountered in recent years. In 2010, the banking sector had a low level of capitalization and provisioning, and depended highly on external financing. In addition, and as referred by the President of the Single Resolution Board, Elke König, Portugal was negatively affected by the international context of disruption of the banking sector. Carlos Costa and Elke König highlighted the improvements that have taken place in the past few years regarding bank capital. The President of the APB, Fernando Faria de Oliveira, and the Chair of the Supervisory Board of the Single Supervisory Mechanism, Danièle Nouy, said that the two main challenges for Portuguese banks at present are recovering profitability and enhancing financial strength. Fernando Faria de Oliveira also reminded that bad loans are not a purely national problem.

During 2016, the possibility of the creation of a “bad bank” for the Portuguese non-performing loans was also widely discussed. The President of Portugal, the Prime Minister, and the Governor of the Portuguese Central Bank argued in favour of such a solution, while bankers such as Fernando Ulrich, António Vieira Monteiro, Nuno Amado, Eduardo Stock da Cunha, and Carlos Rodrigues, expressed a negative opinion in this matter.

Source: The Portuguese Central Bank (Banco de Portugal)

Conjuntura Económica

Portugal: 2016 in Review

III. Financial System

Regarding financial stability, in November the Portuguese Central Bank published a report where it points out the main vulnerabilities of the financial system in Portugal. Concerning the non-specific vulnerabilities of the financial system, the Portuguese Central Bank refers the weak potential growth of the economy and the high level of indebtedness of the private and public sectors. With regard to the specific vulnerabilities of the financial sector, the report refers the high level of non-performing loans (NPLs) and other non-income- earning assets (despite the significant exposures to sovereign debt having stabilized in the most recent period), real estate assets, and credit granted to companies heavily related to emerging markets with significant declines in economic activity. The business model of many banks is also seen as vulnerability as they are particularly affected by the persistence of the low interest rate environment.

Taking into account an overall assessment of the performance of the banking system, the total assets of the banking system continued its downward trend. The eurosystem financing declined to 6.5% of the total assets, being the lowest figure since the beginning of the now extinct Economic and Financial Assistance Program. The return on capital and assets, despite remaining positive, significantly decreased YoY in the nine months of 2016 due to lower results from financial operations. Net interest income increased compared to the first nine month of 2015 due to a sharper reduction in interest charges than on interest income. Lastly, the solvency ratio increased slightly. ROE and ROA Evolution

During 2016, significant changes also occurred in: i) the state-owned bank (CGD) undergoing a recapitalization process and a new Management Board being appointed; ii) BCP, Fosun’s proposal for the purchase of 16.7% at the end of June, that ended with the subscription of a reserved capital increase and the signing of a memorandum of understanding in November; and, iii) Banco BPI, with the takeover bid offer made by Caixabank, a process initiated in April that faced many obstacles throughout the year. As regards the sale of Novo Banco, the final stage of the process has been postponed for early 2017. Lastly, in the matter of Montepio, given the need for the mutual bank to increase capital in order to meet the new requirements made by the regulator, the Banco de Portugal has forced Montepio Geral to become a public limited liability company.

Portugal: 2016 in Review

III. Banking System IV. Business Climate

34 157 companies born between January and November of 2016

Lisbon named as one of the "Hottest Startup Cities" in 2016

According to data released in 2016, during 2015 more than 89% of the non-financial companies were considered micro-enterprises and the SMEs were responsible for 42.7% of the total volume of turnover. The total GVA of non-financial corporations increased by 4.8% in nominal terms. In what concerns the listed companies, for the first nine months of 2016 Sonae Capital reported the highest increase of profits. 2016 was a positive year for Portugal, and particularly for Lisbon which stood out as a technological and entrepreneurial centre while hosting the Web Summit for the first time in Portugal, and with Portuguese startups gaining international recognition.

In 2015, more than 89% of non-financial companies were considered micro-enterprises, 10.6% were SMEs and only 0.3% were considered large companies. In terms of turnover, SMEs accounted for 42.7% of the total, with large enterprises taking up 41.5%, and micro-enterprises contributing only 15.8%. In 2015, the total GVA of non-financial corporations increased by 4.8% in nominal terms, the financial autonomy and indebtedness ratios developed positively and the investment rate increased 1.2 p.p., showing an improvement in the financial situation of companies. The five largest export companies accounted for 15.9% of the trade, approximately equal to the previous year (16%). The 100 and 500 largest companies accounted for 43.7% and 66.8% of the total exports, increasing 0.5 p.p. and 0.8 p.p., respectively, compared to 2014.

According to Informa D&B, between January and November 2016, 34 157 companies were born in Portugal, corresponding to a decrease of 2.1% when compared to the same period of 2015. The agriculture, livestock, fisheries and hunting sector showed the biggest fall with a year-on-year change of -23.7% and the services sector contributed the most with 10 884 new companies. Only the construction sector, the housing and reconstruction sector and the real estate sector showed positive homologous variations in the number of companies created. During the same period, 12 802 companies closed down, a drop of 4.2% in comparison with the same period in 2015.

Regarding the results of listed companies, as of May 2016, it is no longer mandatory to present quarterly results, only the annual and semi-annual results. All the PSI-20 companies have decided to continue reporting the quarterly results with the exception of Mota-Engil. Out of the listed companies with results published at the end of 2016, Sonae Capital presented the highest growth for the first nine months when compared with the same period of 2015. The company with the largest negative change was Cimpor.

Portugal: 2016 in Review

IV. Business Climate

PSI – 20 Results

Sector Companies Q1 2015 Q1 2016 Change % 1S 2015 1S 2016 Change % 9M 2015 9M 2016 Change %

PSI Consumer Goods Corticeira Amorim 8.4 13.9 65% 26.2 35.1 34% 41.60 55.20 33%

Jerónimo Martins 64.8 77.3 19% 149.5 172 15% 252.20 501.60 99%

PSI Consumer Services NOS 23.2 24.4 5% 47.3 50.9 8% 73.50 78.40 7%

Sonae SGPS 30 20 -33% 97 77 -21% 146.00 141.00 -3%

Altri 22.1 25.1 14% 50.2 40.2 -20% 84.70 57.04 -33%

PSI Industrials CTT 22.3 20.7 -7% 39.2 31.7 -19% 50.60 46.00 -9%

Mota-Engil* - - - 12.57 73 481% - - -

PSI Oil & Gas Galp Energia 121.0 114.0 -6% 310.0 247.0 -20% 490.00 361.00 -26%

Semapa 20.2 17.6 -13% 51.2 47.3 -8% 65.90 71.60 9% PSI Raw Materials The Navigator Company 41.8 44.7 7% 100.5 85.5 -15% 141.90 134.30 -5% PSI PHAROL -43.0 -66 -53% -14.2 -8.3 42% -137.00 -56.10 59% Telecommunications EDP 237 263 11% 587 472 -20% 736.00 615.00 -16%

PSI Utilities EDP Renováveis 57 75 32% 69.4 58.8 -15% 99.60 29.00 -71%

REN 20.1 6.1 -70% 62.6 40.5 -35% 91.60 70.50 -23%

BCP 70.4 46.7 -34% 240.7 -197.3 - 264.50 -251.10 -

BPI 30.9 45.8 48% 76.2 105.9 39% 151.00 182.90 21% PSI Financials Montepio 9.8 -19.8 - -28.9 -67.6 -134% -59.46 -67.48 -13%

Sonae Capital -2.9 -4.9 -69% 0.2 9.14 4470% 3.05 13.20 333%

During the year 2016, Portugal, and Lisbon in particular, stood out internationally as relevant technological and entrepreneurial centres at the European and world level. Lisbon hosted the Web Summit for 53 056 participants from 166 different countries which contributed to highlighting this fact. Present at the event were 1 490 startups from around the world, and more than 1 300 influential technological investors and 677 speakers. Among the highest recognition received internationally, Lisbon was included in the ranking Europe’s "Hottest Startup Cities" by Wired, the prestigious American technology magazine. The article points out Beta-i, Uniplaces, Codacy, Talkdesk, Chic by Choice, Unbabel, CrowdProcess, Prodsmart, Hole19, Tradiio and Aptoide as the Portuguese startups to follow.

Portugal: 2016 in Review

V. Political Key Developments

Socialist Party leads voting intentions since February

2016 was a year marked by presidential elections and by important changes in the structure of some political parties

Marcelo Rebelo de Sousa was elected President of the Portuguese Republic. The State Budget for 2017 was approved with the favourable votes of the Socialist Party, Left Bloc, PCP, PEV and PAN, and with the PSD and CDS voting against. The Socialists have been gaining advantage over the Social Democrats in the latest voting intention polls.

Presidential elections took place on 24 January 2016, and Marcelo Rebelo de Sousa (Law Professor and former President of the PSD) became President in the first round with 52% of the votes. Rebelo de Sousa won in all of the country's districts, the best result being achieved in the Viseu district with 62.9% of the votes, and the worst in the Beja district with 31.7%. The second most voted candidate was António Sampaio da Nóvoa (former Dean of the University of Lisbon) with 22.9% of the votes. The abstention rate fell by 2.2 p.p., from 53.4% in 2011 to 51.2% in 2016. On 29 November, the State Budget for 2017 was approved in a final vote, with the favourable votes of the Socialist Party (PS), the Left Bloc (BE), the Communist Party (PCP), the Greens (PEV) and the Party for People, Animals and Nature (PAN), and the votes against of the Social Democrats (PSD) and the centre-right party (CDS). During the three weeks prior to the voting, 450 amendments were proposed to the initial version of the Budget, 180 of which were approved by Parliament. The party that submitted the most amendments was the PS with more than 100 amendments and the party that presented the least was PAN, with 14 amendments. From January to December 2016 five party congresses were held, and the main developments were: i) Assunção Cristas was elected president of CDS with 95.6% of the votes; ii) Pedro Passos Coelho's Political Commission registered 79.8% of the votes, and former Finance Minister Maria Luís Albuquerque was elected PSD Vice-President; iii) the PS Deputy Secretary-General, Ana Catarina Mendes, was appointed as the leading candidate of António Costa's list for the PS National Commission; iv) 21 new members joined the PCP Central Committee, with an average age of 37 years, 20 years less than the average of the 25 members who have stepped down.

Portugal: 2016 in Review

V. Political Key Developments

The voting intention polls carried out in 2016 on average show that: i) the PS has been gaining advantage over the PSD. The greatest difference between the two parties was recorded in November, with the PS ahead by 9.8 p.p., while in January the difference was 0.3 p.p. in favour of the PSD. In December this difference fell to 8 p.p.; ii) the joint result of the PSD and the CDS – the two parties that formed the political coalition “Portugal à Frente” for the legislative elections in October 2015, and that won the elections getting 36.9% of the votes against 32.3% in favour of the PS - was lower than the PS voting intentions in September, November and December, by 1.1 p.p., 3.7 p.p. and 1.2 p.p. respectively, but higher in the remaining months of the year; iii) the BE has been losing its advantage to the CDU and the CDS. The BE has reached its lowest record with 9.0% of the voting intentions in November, down by 1.4 p.p. from January (10.4%). Despite the fall, this party still is the third with the most voting intentions.

Source: Marktest

Portugal: 2016 in Review

VI. Portuguese people with international recognition

Portuguese people with international recognition in 2016

António Guterres

The former Prime Minister of Portugal, António Guterres, was appointed by acclamation by the United Nations General Assembly to succeed Ban Ki-moon as Secretary- General of the organization. On the occasion, António Guterres said: “I believe this process means that the true winner today is the credibility of the UN. And it also made very clear to me that, as Secretary-General, having been chosen by all Member States, I must be at the service of them all equally and with no agenda but the one enshrined in the UN Charter.”

Sports

Portugal won for the first time the European Football Championship UEFA Euro 2016 held in France during June and July. The final was played against the hosting country and favourite team at the Stade de France in Paris, with the support of many Portuguese cheering fans. Despite losing team captain Cristiano Ronaldo in the beginning of the game due to an injury, inflicted by a tackle from a French player, Portugal defeated France 1-0 in extra time, with Eder scoring the winning goal.

Cristiano Ronaldo crowned 2016 with gold by winning the Ballon d'Or for the fourth time, an award attributed annually by the magazine France Football to the best player in the world. Also, football national coach Fernando Santos is one of the three finalists for the World Coach of the Year prize to be awarded by FIFA at a ceremony taking place in Zurich, on 9 January 2017.

At the Olympic Games held in August in Rio de Janeiro, judoka Telma Monteiro won the bronze medal in the category of -57kg. This was the best Portuguese participation ever as other athletes obtained 10 Olympic diplomas for ranking in the top eight in their respective competitions.

At the Paralympic Games, the Portuguese delegation composed of 37 athletes exceeded expectations by winning four bronze medals - Luís Gonçalves in the 400 meters T12 for athletes with visual impairments, Manuel Mendes in the marathon T46 for athletes with motor deficiency, Carlos Macedo in the individual tournament of boccia BC3; and Abílio Valente, António Marques, Cristina Gonçalves and Fernando Ferreira in the boccia teams tournament BC1/BC2 -, and 25 diplomas.

Portugal: 2016 in Review

VI. Portuguese people with international recognition

Portugal hosted the European Roller Hockey Championship and became the European Champion by defeating Italy 6-2 in the final. With this victory, Portugal was awarded its 21st European title, thus remaining the most successful team in the competition. Sara Moreira was crowned European champion of the half-marathon in Amsterdam, a race where Jéssica Augusto also won a bronze medal for third place. Portugal won seven medals in the Canoe Spring World Cup 3 held in Montemor-o-Velho, by athletes Emanuel Silva and João Ribeiro (gold in K2 500 and K2 1000), Hélder Silva (gold in C1 200), Fernando Pimenta Silver in K1 5000 and bronze in K1 1000) and Beatriz Gomes, Francisca Laia, Helena Rodrigues and Márcia Aldeias (bronze in K4 200).

In table tennis, the mixed team composed of João Monteiro and Daniela Dodean Monteiro (of Romanian nationality) won the gold medal in the European Championships held in Budapest in October. Portugal also brought home two more medals in this competition, silver for Yu Fu and bronze for the pair Tiago Apolónia / João Geraldo.

Science

Neide Vieira: Researcher at the University of Minho received the NARSAD grant, one of the most prestigious awards "in mental health research”. The Portuguese scientist intends to identify new biomarkers of cognitive decline inherent in aging, neurodegeneration and exposure to chronic stress. The grant was awarded by the Brain & Behavior Research Foundation (USA), the organization providing the highest support for research in neurobiology in the world. The jury included two Nobel Prize winners.

Elvira Fortunato: Researcher at the Materials Research Center (CENIMAT), Faculty of Science and Technology of Universidade Nova de Lisboa, creator of the paper transistor, received the Blaise Pascal Medal, a distinction awarded by the European Academy of Sciences for the first time to a Portuguese scientist. The European institution justifies awarding the medal to the Portuguese researcher and teacher due to the "exceptional originality and creativity of her research in Physics and Materials Science".

Miguel Araújo: The Portuguese researcher at the University of Évora received the Rey Jaime I prize for Environmental Protection in Spain for studying the effects of climate change on biodiversity. This was the first time that the researcher distinguished with this award does not have Spanish nationality.

Marta Entradas: The ISCTE-IUL scientist with research focusing on the field of scientific communication and who has 20 articles published in international journals has received the European prize for young researchers, awarded by the European Association for the Promotion of Science and Technology.

Penousal Machado: The teacher and researcher from the University of Coimbra (FCTUC) was granted the EvoStar Award for Outstanding Contribution to Evolutionary Computation in Europe, awarded by EvoStar, becoming the youngest researcher to receive the prize. This is the most important European award in the field of Biological Computing attributed in the European area.

Portugal: 2016 in Review

VI. Portuguese people with international recognition

Culture

In the film industry, actor Nuno Lopes received the Special Prize for Best Actor at the Venice International Film Festival for his performance in the film "São Jorge" by Marco Martins. Also distinguished were filmmakers Pedro Costa who received the honorary award at the New Wave Film Festival for his film "Horse Money"; Leonor Teles, winner of three international prizes for the short film "Balada do Batráquio", the highest being the Golden Bear at the Berlin Film Festival; and Joana Pimenta who won the 58th edition prize of the Bilbao International Documentary and Short Film Festival with the short film "Um campo de aviação".

Among the prizes in architecture, the most important were awarded to Luís Pedro Silva for the new Cruise Terminal at the port of Leixões by AZAwards magazine; Eduardo Souto de Moura, who won the Piranesi Prix Prize of Rome for his career accomplishments; and distinguished by Archdaily were Paulo Lobo, the FCC Architecture studio, Ateliermob, Coletivo Warehouseand, and Elisabete de Oliveira Saldanha. The three literary works recognised internationally were "Era uma vez um Homem" by João Nuno Azambuja, "Índice médio de felicidade" by David Machado, and "Galveias" by José Luís Peixoto. In music, the awards received by Portuguese artists include the Best Artist Prize given to fado singer Mariza by the British magazine Songlines, and the Grammy Lifetime Achievement Award presented to Carlos do Carmo.

Lastly, photographer Mário Cruz won the Contemporary Themes category of the World Press Photo competition, and designer Inês Caleiro was honoured at the Fashion Crowd Challenge. As part of the commemorations of the 50th anniversary of the Calouste Gulbenkian Foundation French Delegation, 250 works of the Portuguese painter Amadeo de Souza Cardoso were exhibited for 3 months at the Grand Palais, in Paris.

Portugal: 2016 in Review

VI. Portuguese people with international recognition

Culture

Portugal: 2016 in Review

VII. Head of State and Head of Government official visits

Head of State and Head of Government made 25 official visits during 2016

The President of the Republic and the Prime Minister celebrated the National Day of Portugal in Paris

On 10 June, the President of the Republic and the Prime Minister travelled to Paris to celebrate the National Day of Portugal with the Portuguese Community in France. The President of the Republic began his official State visits by meeting with Pope Francis at the Vatican. He also visited Brazil, Cuba and several European countries, and attended the Summit of Heads of State on Refugees, the CPLP Summit, and the Ibero-American Summit. The Prime Minister paid a five-day visit to China where several economic and cultural agreements were signed.

Map of the official State and Government visits

Legend:

State Visits Government Visits Joint Visits

M ARCH APRIL [1] Vatican, President of the Republic [3] France (Strasbourg), President of the Republic On his first State visit, the President of the Republic, Visit to the European Parliament. Meeting with the Marcelo de Rebelo de Sousa, met with Pope Francis President of the European Parliament, Martin to present a formal invitation for a visit to Portugal Schulz, and reception for the Portuguese Members on the occasion of the celebrations of the Centenary of the European Parliament. of the Apparitions of Our Lady of Fátima. [4] Greece (Athens), Prime Minister [2] Spain (Madrid), President of the Republic Official visits to President Prokopis Pavlopoulous and Meeting with the King of Spain, Felipe VI. Prime Minister Alexis Tsipras. [5] France (Paris), Prime Minister Meeting with French Prime Minister Manuel Valls.

Portugal: 2016 in Review

VII. Head of State and Head of Government official visits

MAY SEPTEMBER [6] Mozambique, President of the Republic [13] United States of America (New York), Meeting with his Mozambican counterpart Filipe President of the Republic Nyus. President Marcelo Rebelo de Sousa participated in [7] Italy (Rome), President of the Republic the Summit of Heads of State on Refugees hosted by Meeting with his Italian counterpart Sergio President Barack Obama at the United Nations Mattarella. Reception for representatives of the Trusteeship Council, in New York. In his speech, the Portuguese community living in Italy, and for Italian Portuguese President praised the integration of teachers of Portuguese. refugees and migrants in Portugal. Marcelo Rebelo [8] Germany (Berlin), President of the Republic de Sousa took advantage of this visit to strengthen Official visits to German President Joachim Gauck diplomatic relations with his counterparts from and Chancellor Angela Merkel. Brazil, Guinea Bissau, Senegal, Mozambique, Ivory [9] Turkey (Istanbul), Prime Minister Coast, Ghana, and Chile. He also met with the King António Costa attended the World Humanitarian of Spain and the Secretary-General of the United Summit. Nations. [14] Brazil (São Paulo and Rio de Janeiro), Prime JUNE Minister [10] France (Paris), the President of the Republic Meeting with President Michel Temer. and the Prime Minister [15] Greece (Athens), Prime Minister President Marcelo Rebelo de Sousa visited Paris Attending the Mediterranean Europe Summit. accompanied by Prime Minister António Costa to OCTOBER hold the celebrations of the 10th June, the National [16] Sweden (Stockholm), Prime Minister Day of Portugal, of Camões, and of the Portuguese Meeting with his Swedish counterpart Stefan Communities. French President François Hollande Lövfen. received the Portuguese President and the Prime [17] Switzerland (Bern and Geneva), President of Minister at the Elysée Palace and together they the Republic visited Mayor of Paris Anne Hidalgo, where Marcelo Rebelo de Sousa met with his Swiss President Marcelo Rebelo de Sousa honoured the counterpart Johann Schneider-Ammann, and role of the Portuguese emigrants in France. addressed the Swiss Parliament. He held a meeting with representatives of the Portuguese community JULY in Switzerland, where he expressed his gratitude for [11] Poland (Warsaw), Prime Minister the contribution made by this community to the António Costa attended the NATO Summit. Portuguese economy. [18] Cuba (Havana), President of the Republic AUGUST President Rebelo de Sousa visited the historical [12] Brazil (Brasília, São Paulo and Rio de Janeiro), centre of Havana accompanied by the President of President of the Republic the Council of State and of the Council of Ministers Attending the opening of the Olympic Games. of Cuba, Raúl Castro, with whom he had dinner later Received by Acting President Michel Temer. at the Revolution Palace. On the same day, the Meeting with Mayor of São Paulo Fernando Haddad. Portuguese President launched the Library “Eça de Reception for the local Portuguese community. Queirós” at the Chancellery of the Embassy of Portugal in Havana, and closed the Portugal-Cuba Business Forum. He also paid a visit to the late Cuban historical leader Fidel Castro.

Portugal: 2016 in Review

VII. Head of State and Head of Government official visits

[19] China, Prime Minister António Costa made an official visit to China meeting with President Xi Jinping, Prime Minister Li Keqiang, the President of the People's Congress, Zhang Dejiang, and the Governor of the Province of Guangdong, Zhu Xiaodan. Several economic and cultural agreements were signed, in particular agreements for training and research between the Chinese multinational Huawei and the universities of Évora and Trás-os-Montes, and the Portuguese Employment and Vocational Training Institute (IEFP); the protocol between Turismo de Portugal and the aviation transportation operator HNA to connect China to Portugal by direct flights; the memorandum of understanding between Portugal and Macau to promote entrepreneurship and provide support to startup companies; and the agreement to build a new terminal in the port of Sines, signed between the Haitong Bank, the China Development Bank and the Portuguese Trade and Investment Agency (AICEP). [20] Macao, Prime Minister António Costa attended the Ministerial Conference of the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries (Forum Macao). He took the opportunity to strengthen the diplomatic relations with his counterparts from Cape Verde, Guinea-Bissau, and Mozambique, and with representatives from Angola, Brazil, and East Timor. [21] Colombia (Cartagena), President of the Republic and Prime Minister Attending the Ibero-American Summit. [22] Brazil (Brasília), President of the Republic and Prime Minister Attending the CPLP Summit. NOVEMBER [23] Spain (Madrid), Prime Minister Meeting with the President of the Spanish Government, Mariano Rajoy. [24] United Kingdom (London), President of the Republic Marcelo Rebelo de Sousa was received by Queen Elizabeth II and had a meeting with Prime Minister Theresa May. He visited Portuguese artist Paula Rego and also the City (London's financial center) where he met with potential investors, referring that "Brexit should not affect relations between Portugal and the United Kingdom". [25] Morocco (Marrakesh), Prime Minister Attending the Climate Conference.

Receptions The President of the Republic and the Prime Minister welcomed to Portugal several prominent figures of State and of Government throughout 2016, among whom: the Prime Minister of Cape Verde, José Maria Neves (while President Cavaco Silva was still in office); the President of São Tomé and Príncipe, Patrice Émery Trovoada and the Prime Minister of Mozambique, Carlos Agostinho do Rosário, during the month of March; the Polish President Andrzej Duda, in April; UN Secretary-General Ban Ki-moon, in May; Cape Verdean President Ulisses Correia e Silva, President of the European Council Donald Tusk, and the Prime Minister of Côte d'Ivoire, Daniel Kablan Duncan, in June; the French President François Hollande, in July; the Egyptian President Abdel Fattah el-Sisi, and the Kings of Spain, in November; and lastly, the Czech President Miloš Zeman, in December.

Portugal: 2016 in Review

VII. Head of State and Head of Government official visits

[19] China, Prime Minister [21] Colombia (Cartagena), President of the António Costa made an official visit to China meeting Republic and Prime Minister with President Xi Jinping, Prime Minister Li Keqiang, Attending the Ibero-American Summit. the President of the People's Congress, Zhang [22] Brazil (Brasília), President of the Republic and Dejiang, and the Governor of the Province of Prime Minister Guangdong, Zhu Xiaodan. Several economic and Attending the CPLP Summit. cultural agreements were signed, in particular NOVEMBER agreements for training and research between the [23] Spain (Madrid), Prime Minister Chinese multinational Huawei and the universities of Meeting with the President of the Spanish Évora and Trás-os-Montes, and the Portuguese Government, Mariano Rajoy. Employment and Vocational Training Institute (IEFP); [24] United Kingdom (London), President of the the protocol between Turismo de Portugal and the Republic aviation transportation operator HNA to connect Marcelo Rebelo de Sousa was received by Queen China to Portugal by direct flights; the memorandum Elizabeth II and had a meeting with Prime Minister of understanding between Portugal and Macau to Theresa May. He visited Portuguese artist Paula promote entrepreneurship and provide support to Rego and also the City (London's financial center) startup companies; and the agreement to build a where he met with potential investors, referring new terminal in the port of Sines, signed between that "Brexit should not affect relations between the Haitong Bank, the China Development Bank and Portugal and the United Kingdom". the Portuguese Trade and Investment Agency [25] Morocco (Marrakesh), Prime Minister (AICEP). Attending the Climate Conference. [20] Macao, Prime Minister António Costa attended the Ministerial Conference of the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries (Forum Macao). He took the opportunity to strengthen the diplomatic relations with his counterparts from Cape Verde, Guinea-Bissau, and Mozambique, and with representatives from Angola, Brazil, and East Timor.

Portugal: 2016 in Review

VIII. Main Economic Data

Portugal: 2016 in Review

IV: More About Portugal

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