Trend reversing investment in northern Portugal

By Kim Schiffmann, in World · 26-07-2019 01:00:00 · 0 Comments

Public investment in northern municipalities increased by 42.4 percent in 2017

The investment of 42.4 percent in 2017, compared to the previous year, sees the reversing of the trend of “strong decline” between 2013 and 2016, reveals the North Structure report released on 22 July.

“Following the downward trend that marked the period from 2013 to 2016, public investment by municipalities in the Northern region increased again in the most recent period, increasing by 42.4 percent in 2017,” describes the document prepared by the Northern Regional Coordination and Development Commission (CCDR-N).

Even so, the “financial dimension” of public investment by municipalities “is still small”, since “on average” public investment “represented between 2010 and 2017 only 0.96 percent of the region’s GDP [Gross Domestic Product] “

The value is considered “manifestly small” given its potential impact “on economic growth and the real convergence processes of the territories”.

According to the report, the contribution of the aggregate value of public expenditure in 2017 was 3 percent in Cávado and 2.9 percent in the Porto Metropolitan Area, while the region’s average was 3.9 percent.

“In other cases, especially in low-density territories, public expenditure as a percentage of GDP is higher, exceeding in 2017 the 8 percent mark in the Upper Tâmega and Trás-os-Montes”, the document states. In the various areas of the North, public investment by municipalities “was of greater economic importance in low-density territories, especially in the period of economic recession.” The “most significant growth” occurred in Cávado (90.3 percent), Terras de Trás-os-Montes (72.9 percent) and Alto Tâmega (64.5 percent),
According to CCDR-N, “the acquisition of goods and services” was the “largest component of public expenditure” of the region’s municipalities in 2017, “representing about 27.5 percent of the total”.

“Personnel expenses accounted for almost the same weight, representing 27.4 percent of total expenditure”. The acquisition of capital goods, commonly known as public investment, accounted for 18.7 percent of the total expenditures of the municipalities under study.


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