Portuguese economic experts warn of structural risks and talent loss

Economists and political figures are highlighting structural challenges facing the Portuguese economy, specifically regarding productivity, talent retention, and the era of low interest rates.

Economist João Moreira Rato, former president of the IGCP, warns that the period of ‘cheap money’ and low interest rates is unlikely to return. He attributes rising sovereign bond yields to three structural factors: the massive debt accumulated by states to stabilize economies during the COVID-19 pandemic, structural deficits driven by aging demographics and rising healthcare costs, and the intense demand for long-term financing to build data centers for Artificial Intelligence.

Complementing these economic concerns, Deputy Miguel Costa Matos notes that Portugal is struggling to retain its highly qualified youth. He observes that while the economy is growing, it is failing to transition quickly enough to high-value sectors. This lack of economic transformation results in a ‘brain drain,’ where skilled professionals emigrate for better wages, often finding higher pay abroad in service roles than in technical engineering positions at home.