Since the start of Portugal 2020, the European Funds have played a decisive role in the performance of the Portuguese economy and the recovery of its growth, with effects that last beyond the period of implementation of the funds.

The positive effect on GDP is accompanied by gains in Productivity, Employment, Wages and Exports, but the pressure of aggregate demand on imports affects the evolution of the Balance of Goods and Services.

But let's look at the figures, it is estimated that "Portugal 2020":

  • It has had an average impact on GDP of +1.3% (2015-2023) and will have +1.6% of GDP over the next 20 years, with a long-term multiplier effect of more than 3 euros of GDP for every euro of Public Expenditure (long-term multiplier effect),  
  • Generated +2.3% in labor productivity by 2023;  
  • It has led to a growing impact on real wages (+1.72% in 2025), 
  • 80% of national GDP gains were concentrated in the country's least developed regions (North, Center, Alentejo and Azores).

Assessing the implementation of Portugal 2020, it should be noted that in May of 2022 it reached a commitment rate of 114% and an implementation rate of 75%. Up to that point, €30.7 billion had been approved to support projects with an eligible investment of €47.1 billion, translating into an average funding rate of 65.2% on the eligible investment.

The value of the funds executed was €20.1 billion, or 75% of the value of the funds programmed (execution rate) and 65% of the total funds approved (realization rate). The amount of funds paid out to beneficiaries totaled €20.8 billion, which corresponds to 77% of the funds programmed in Portugal 2020.

The €20.1 billion in executed funds is distributed among the various thematic areas, with the emphasis on competitiveness with €6.1 billion, human capital with €3.8 billion and rural development with €3.7 billion.

Although still far from 100% implementation, we can identify the contribution that Portugal 2020 has made to SMEs and business development. It would therefore be prudent for SMEs to pay attention to Portugal 2030 so as not to miss out on EU funds. 

Former, prrime minister António Costa pointed out that Portugal 2030 could effectively be the last major EU support coming from Europe. 

Returning to Portugal 2020, its aim has been to effectively contribute to reducing regional disparities by concentrating support on the least developed regions. Support is allocated to the different types of region in the country and depends on the level of development of each region (the lower the level, the greater the support) (figure-1).

Figure 1 - Funds approved and executed by region 

(source: Portugal 2020 - European Union Funds Newsletter of March 31, 2022)

Portugal has four less developed regions (North, Center, Alentejo and Azores), one in transition (Algarve) and two more developed regions (Lisbon and Madeira).

If we consider the "share" of each region in the impacts at national level, it is the North and Center regions that absorb most of the gains, representing 40.4% (compared to 37.9% of Portugal 2020 funds allocated to the region) and 23.5% (26.6%) of the total, respectively. This is followed by the AML with 13.7% (8.8%), the Alentejo with 12.0% (13.4%), the RAA with 4.6% (7.1%), the RAM with 3% (3.5%) and the Algarve with 2.8% (2.7%).

That said, given that the location of the investment may contribute to a greater or lesser amount of financial support, it is important to emphasize that, when investing in Portugal, location will be one of the main points of emphasis. 

Of course, Portugal 2020 has had a positive impact on companies, even if many consider it insufficient. There is no reason why Portugal 2030 should be any different, and this could once again be the last major EU program. 

Being aware of Portugal 2030 is an important factor, and having a specialized consultancy that identifies opportunities and added value for companies is imperative. Kenaz is your business partner!

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