With the most recent rejection of the UK’s withdrawal agreement, the Brexit theme is causing more uncertainty than ever.
With this being a decisive week for both the United Kingdom and the European Union, also Portugal should be wary about the future.
Depending on the agreement (or the lack of agreement) on the British exit, the consequences deriving from it can differ, although there’s a huge probability on the table of the UK’s commerce being seriously affected.
What can be affected by Brexit
1. Portuguese economy can lose up to 0,4%
2. Exportation can decrease up to 26%
3. Decrease in tourism
4. Impact in financing
Given that they are Portugal’s 4th biggest market for exportations, sales can really struggle if the UK and the EU don’t come to an agreement on this matter, with the pound depreciation and the risk of commercial barriers being reintroduced.
On the other hand, there is a huge concern about people and citizens, going both ways. On the one hand, there are a lot of Portuguese emigrants in the UK, being the main destiny for Portuguese emigrants. There is also a growing number of Brits here in Portugal – being the third biggest European community here – so we can’t ignore the human ties between the two nations. So here is predicted to happen a substantial growth in the portuguese real estate for people coming from the United Kingdom. As it’s already being reported, Portugal is already sensing (and benefiting from) an income of British population, specially in some (previously) poorly populated areas, revitalizing them.
What is guaranteed, with a British exit, is the decreased facility of human, product and capital circulation between Portugal and the UK.
For Portugal, the most affected sectors should be IT, electronic and optical products, electric equipment and vehicles. According to a study of the Confederation of Portuguese Business, Portugal can face a decrease of 15% to 26% of exports to the United Kingdom. Portugal would be the 6th most affected country, according to the data released. Although they see here a great opportunity for Portugal to reroute those commercial ties to other potential markets, diversifying the exports targets.
In the tourism industry, less purchasing power in the UK means a threat to the Portuguese tourism, with a large part of our tourists being British. The good part is: the Portuguese Government have already announced they won’t be asking the British tourists for a visa, hoping they will do the same.
The last thing is, with the huge contributions the UK makes to the European Union, losing that can affect the community and introduce bigger financing costs to the remaining countries.
To summarize, the Brexit question is still uncertain and we still don’t know for sure how it can impact Portugal. For now, we can only predict some consequences deriving from our country’s close relations with the United Kingdom. After that, all we can do is wait and see how the next days go and what decisions will be made.