"It is necessary to pay very special attention to the Algarve region, which is extremely dependent on tourism", defended this morning the Minister of State, Economy and Digital Transition, Pedro Siza Vieira, before the government’s minister of the Commission for Economy, Innovation, Public Works and Housing, in the Assembly of the Republic.
Thus, in order to aid the highly specific situation of the region, Pedro Siza Vieira said that the Government is preparing a specific support program for the region.
According to the Minister of Economy, this program must be “much more decisive in order to help companies to survive”, it should boost internal and external demand and help the tourism sector in the Algarve region to survive until the next summer.
Another component of the specific program for the Algarve, he said, must also be that of “mitigating the very negative impact” on the income of people in the region.
“Tourism across the European Union is a very relevant activity. The European Union estimated a month and a half ago that tourist activity in the Union had a reduction of 60%. What we are experiencing in the Algarve or Madeira region is not a specific Portuguese problem”, he stressed.
“The European Union recognizes that heavily tourism-focused regions need specific support. They may even have been spared the pandemic, but they will be devastated from an economic point of view,” he added.
The Economy Minister did not put forward a date for the presentation of the program, but said it would be soon.
Portugal accounts for at least 1,620 deaths associated with covid-19 in 44,129 confirmed cases of infection, according to the latest bulletin from the Directorate-General for Health (DGS). Measures to combat the pandemic have paralyzed entire sectors of the world economy and led the International Monetary Fund (IMF) to make unprecedented predictions in its nearly 75 years of existence: the world economy could fall 3% in 2020, dragged by a contraction of 5.9 % in the United States, 7.5% in the euro zone, and 5.2% in Japan.
For Portugal, the European Commission expects the economy to drop by 9.8% of Gross Domestic Product (GDP) in 2020, a contraction above the previous projection of 6.8% that was estimated by the Portuguese Government.
However, the Government expects the economy to grow 4.3% in 2021, while Brussels anticipates a more optimistic growth, of 6.0%, above what it forecast in the spring (5.8%). The unemployment rate is expected to rise to 9.6% throughout this year, and drop to 8.7% in 2021. As a result of the strong recession, the budget deficit is expected to reach 6.3% of Gross Domestic Product (GDP) in 2020 and public debt to 134.4%.