PORTUGAL: An Introduction to Public Law

Economic, Legal and Political Trends in 2024 

As the world continues to navigate the post-pandemic landscape and attempts to overcome the impacts of Russia’s invasion of Ukraine and, more recently, the conflict in the Middle East, the OECD’s interim forecasts point to a slight slowdown in the world economy in 2024.

As far as Portugal is concerned, the Portuguese government also expects the economy to slow down in 2024, amidst a context marked by the persistence of high geopolitical uncertainty, as well as a restrictive monetary policy whose effects have not yet fully materialised, with GDP expected to grow by 1.5% in real terms in 2024.

In political terms, the year 2024, particularly its first quarter, will be marked by three very important electoral moments in Portugal.

4 February will see the elections for the Regional Legislative Assembly of the Azores, followed by the elections for the National Parliament on 10 March. Portuguese citizens will then vote again on 9 June, this time to elect the national members of the European Parliament.

Elections are pivotal events that always have significant impacts on a country’s economic trajectory and these elections, especially those for the Azorean Parliament and for the National Parliament, are two of the most relevant in the Portuguese context, since they will determine the political party that will lead the Azorean Regional Government and the National Government, respectively.

These two sets of elections may lead to a change in course in the structural economic policies pursued to date, if there is any change in the political parties leading the Azorean and National Governments. It is important to note that competition between the left and right-wing parties is very tight according to the polls, and it is thus impossible to predict which parties will win, as well as if the winning party in the Azores will repeat this feat at the national level just a month later.

Two of the most significant projects put on hold when the elections were formally announced are the privatisation of SATA Air Azores and the privatisation of TAP Air Portugal, two very important airline companies, the first at the regional level and the second at the national level. However, these privatisation processes will certainly get back underway soon after the elections, given their importance to the Portuguese economy. It is expected that they will be concluded in 2024 or at the beginning of 2025, at the latest.

There are three other major sectors that will mark the year 2024 in Portugal in terms of investment: rail and road transport, telecommunications and digital connectivity, and defence.

The investment programme to upgrade and modernise the National Railway Network will proceed in 2024, with the expected conclusion of the Ferrovia 2020 Investment Programme and the continued implementation of the initiatives included in the National Investment Programme 2030 (PNI 2030).

The main projects underway and already at an advanced stage of completion include (i) the modernisation of the Beira Alta Railway Line, (ii) the construction of the new Alentejo Railway Line, linking Évora to Elvas, (iii) the modernisation of the Northern Railway Line, between Espinho and Gaia, (iv) the modernisation of the Sines Railway Line, (v) the modernisation of the Cascais Railway Line, and (vi) the electrification of the Western and Algarve Railway Lines. The modernisation of the Douro Line, with work starting on the Marco/Régua section, is also planned to continue in 2024.

In 2024, CP – Comboios de Portugal, EPE also aims to start manufacturing 117 new electric railcars (up to 62 for urban services in Lisbon and Oporto and up to 55 for regional services), with the intention of continuing the rehabilitation of rolling stock in order to meet needs until the new railcars are delivered, with a view to improving and increasing CP’s offer.

Last but not least, in terms of railway projects, the most important is undoubtedly the project for the New Porto-Lisbon High-Speed Line, which is expected to see significant developments in 2024, with relevant government decisions having already been taken and commitments made for the future with the main opposition party. The first phase of this project began on 15 January 2024, with the launch of the tender for the Concession of the High-Speed Railway Line between Porto (Campanhã) and Oiã, with an approximate total value of EUR1,661,364,717.55 and with a deadline for the submission of bids by June 2024.

As regards telecommunications and digital connectivity, Portugal’s geostrategic position concerning international connectivity and data infrastructures will continue to be strengthened with the development of a strategy for connectivity and data infrastructures. The aim is to support the development of technological industries and location of technology-based companies and the creation of skilled jobs, making a decisive contribution to the digital transformation of society and the economy, and improving Portugal’s competitiveness in the global digital economy.

Also in relation to telecommunications and digital connectivity, the “National Strategy for Connectivity in Very High Capacity Electronic Communications Networks 2023–2030” will continue to be pursued, with the finalisation of the installation, management, operation and maintenance of very high capacity networks in white areas, and the start of network installation work, reinforcing territorial cohesion and access for all citizens and companies to quality electronic communications services.

In this context, it is worth highlighting the recent launch, at the end of December 2023, of the public tender for the installation, management, operation and maintenance of very high capacity electronic communications networks, with an approximate total valueEUR172,260,400.00 and with a deadline for the submission of bids by March 2024.

Finally, the defence sector, which has occupied an increasingly important place in the Portuguese government’s agenda, gained a new and stronger focus following Russia’s invasion of Ukraine and the re-explosion of the Middle East conflict. This geopolitical uncertainty increased the Portuguese government’s sense of urgency to strengthen European defence and transatlantic solidarity, ensuring Portugal’s international commitments and the recognition of these priorities in the new National Strategic Defence Concept.

In this sense, it was deemed essential to continue investing in means and equipment to ensure that the Armed Forces can fully fulfil their missions, be an effective guarantor of the population’s security and well-being, and act as an indispensable strategic reserve for the state’s resilience in the face of complex emergencies. This investment generates added value through research, industry and innovation, further contributing to the internationalisation of the Portuguese economy.

Moreover, the implementation of the Military Programming Law, approved in 2023, provides for a number of structuring projects for sovereignty and public interest missions in 2024, including the acquisition of naval assets and aircraft and the expansion of cyberdefence responsibilities and resources, funded by the Military Programming Law, and the development of new capabilities, leveraged by the National Defence Strategy for Space and the National Cyberdefence Strategy, in order to respond to the threats arising from the growing interconnectivity and digitalisation of society.

In view of the above, while one might expect a certain degree of temperance in the first quarter of 2024 in Portugal due to the upcoming elections, with so many important projects in the pipeline, it is expected that from the second quarter of the year onwards Portugal will be very active in terms of structuring investments for the country’s economy.