Portugal was the world’s richest country when its colonial empire in Asia, Africa, and South America was at its peak. Because this wealth was not used to develop domestic industrial infrastructure, however, Portugal gradually became one of western Europe’s poorest countries in the 19th and 20th centuries. From the mid-1970s, after the Portuguese revolution, the country’s economy was disconnected from Portugal’s remaining overseas possessions in Africa and reoriented toward Europe. In 1986 Portugal joined the European Economic Community (ultimately succeeded by the European Union [EU]), spurring strong and steady economic growth. Similar to those of other western European countries, Portugal’s economy is now dominated by services; manufacturing constitutes a significant share of output, while agricultural output is relatively minor, accounting for less than 3 percent of output. In the early 21st century, economic growth had improved living standards dramatically, raised incomes, and reduced unemployment. In addition, since Portugal’s accession to the EU, large inflows of structural funds, private capital, and direct investment have fostered and sustained development. Portugal was one of the countries hardest hit by the euro-zone debt crisis that erupted in 2009, however, and a raft of government measures proved ineffective at halting the country’s economic meltdown. In 2011 the EU and the International Monetary Fund authorized a €78 billion (about $116 billion) bailout package for Portugal, contingent on the adoption of strict austerity guidelines.
Source: britannica.com
