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2023 OECD Economic Surveys: Portugal 2023

image of OECD Economic Surveys: Portugal 2023

The Portuguese economy has rebounded strongly from the COVID-19 crisis. Though high inflation and weak global economic conditions have slowed growth in 2022, renewed fiscal support helped to cushion the impact. Public debt relative to GDP has declined below its 2019 level, but rapid population ageing and strong investment needs are increasing fiscal pressures. Potential growth and productivity gains have declined and skill shortages have emerged. Implementing the ambitious Recovery and Resilience Plan and ensuring fiscal sustainability through more efficient spending and a strengthened fiscal framework are key to a sustained recovery. Streamlining complex administrative processes as part of the public sector’s digitalisation efforts and reviewing regulations in professional services and retail trade can improve productivity. In addition, investment in the green transition should continue to reduce greenhouse gas emissions and strengthen climate resilience, in line with Portugal’s goal of carbon neutrality. At the same time, while life expectancy is high, the health sector is suffering from staff shortages, underinvestment and long waiting lists. Moving towards a more integrated system of primary, community and hospital care could improve the quality of care and value for money. Reforming primary care would also help to improve access for low-income households and limit avoidable hospitalisations.

SPECIAL FEATURE: IMPROVING HEALTH OUTCOMES

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Improving health outcomes

Health outcomes have improved substantially during recent decades and life expectancy is high compared with other OECD countries. Overall, the universal National Health Service offers good quality-care and has delivered high vaccination rates, while public spending remains contained. However, challenges related to staff shortages and heavy pressures on staff, long waiting lists in the public sector and high out-of-pocket expenditures have been building and were further compounded by the COVID-19 pandemic. This partly reflects a system that remains strongly based on hospital care and has suffered from underinvestment in the years following the global financial crisis. In addition, obesity, a lack of physical activity and high alcohol consumption are weighing on long-term health outcomes, while the ageing of the population will increasingly require more and different healthcare services. The government has initiated a wide-ranging reform agenda through the Recovery and Resilience Plan and the 2022 reform of the National Health Service, with the aim of enhancing the integration of primary, community and hospital care. Reforms will need to address the generally weak budgeting and accountability practices, building on improved information systems and regular evaluations to ensure more efficient spending. Reforming primary care should remain a priority to scale up efficient prevention programmes, promote cost-efficient choices by care providers, improve access for low-income households and limit avoidable hospitalisations.

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