Economies by the Match: Listen to Portugal and Spain

I'm Eilen Seniors, senior global macro strategist with the investment adviser group. As the FIFA World Cup two thousand twenty six unfolds, we're taking you beyond the pitch into economic and political stories shaping the nations competing for the trophy. This is economies by the match.

Let's talk about Portugal.

Portugal never won a World Cup. The closest they came in was the third place in nineteen sixty six. Portugal is a member of the European Union and the Eurozone economy. Portugal has quietly become one of the Europe's outperforming economy this year. While the eurozone as a whole is growing at around one point two percent, Portugal is running closer to two percent this year, and with inflation near target and unemployment is around six percent.

Tourism and services are the engine of this economy. The public that is falling steadily towards the eighty percent share of the GDP, and the country is the in the final stretch of deploying its European Union recovery funds.

During the European financial crisis of two thousand fifteen and sixteen, Portugal was a member of the economies that struggled the much.

It was Portugal, Ireland, Italy, Greece, and Spain, an acronym labeled as pigs that experienced significant economic hardships.

Now fast forward a decade, most of these economies are faring much better than the northern European economies like Germany.

You know, politically, Portugal has been on a roller coaster.

They had three parliamentary elections in just over four years, and the prime minister Luis Montenegro leads a center right minority government that won the last year's election but lacks a majority.

So governing requires constant negotiation and coalition building.

The right wing populist Chekka party has become a major force in the country, and its leader is contesting the president.

With the long serving president now, term is limited.

And just days ago, during first days of June, a nationwide general strike over a contested labor reform brought much of the country to a standstill.

Still with that, Portugal is a fragmented but a well functioning democracy in Europe.

Let's talk about Spain. Spain won the two thousand ten World Cup in South Africa. If you remember, they played against Netherlands.

Spain is a member of European Union and also a eurozone economy.

It's a standout major economy in Europe right now. It grew around two point eight percent in two thousand twenty five, more than double the eurozone average, and it is forecast to grow another two point two percent or so in two thousand twenty six.

The main drivers of this strong growth are tourism services and strong investment bank by the EU funds, and they have a labor force expanding by immigration.

The government has even improved its public finances along the way as well, which worked really well for Spain.

Talking about politics, the prime minister Pedro Sanchez governs through a very fragile coalition, I would say, and has been a distinctive force on the world stage.

Domestically, he faces a resurgent center right and far right Fox Party with tricky regional elections in two thousand twenty six, yet he insists that he will be running again in two thousand twenty seven.

Again, this is Eilen Senios covering global markets for Truist Wealth. For more information about our research, please visit w w w dot truest dot com forward slash ralph forward slash insights. Enjoy the World Cup two thousand twenty six.

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