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Portugal export-oriented investment still growing despite delays

Portugal export-oriented investment still growing despite delays
FILE PHOTO: Luis Castro Henriques, President of AICEP (Agency for Investment and Foreign Trade of Portugal), attends an interview with Reuters in Lisbon, Portugal February 26, 2018. Picture taken February 26, 2018. REUTERS/Rafael Marchante -
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RAFAEL MARCHANTE(Reuters)
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LISBON (Reuters) – Investor caution due to Brexit risks and a global slowdown has delayed some investment decisions in Portugal’s export-oriented sectors, but foreign cash keeps flowing into such projects at a rate authorities hope could surpass last year’s record.

Luis Castro Henriques, head of the state agency for promotion of exports and investment, told Reuters that despite the delays registered over the past four months, “we are processing more and better investment”.

An export push and a tourism boom have stoked Portugal’s recovery from its 2011-14 debt crisis and bailout. In 2017, the economy grew at its strongest pace since the turn of the century but last year export growth slowed down, and the economic expansion cooled off somewhat.

Castro Henriques’ AICEP agency handles mostly foreign direct investment that involves tax and other incentives to support exports and innovation. Last year, the amount nearly doubled from 2017 to a record 1.15 billion euros (1.00 billion pounds).

“The only thing we have felt so far is that the period required to take the investment decisions has extended, but with the same realisation rate,” he said, citing six months as a typical delay on top of the normal 12 months.

He said AICEP still had a pipeline of over 2 billion euros of investments under evaluation, with new projects constantly being added. “So I expect exports to rise, GDP to grow and investment to flow into Portugal’s innovation and technology” sectors, Castro Henriques said.

(Reporting By Sergio Goncalves, writing by Andrei Khalip; Editing by Catherine Evans)

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