Portugal is advancing in the energy transition, but failing to attract the competitive advantages to reindustrialise the country, says Mckinsey. A successful green reindustrialisation process could represent a 15% jump in Gross Domestic Product (GDP) by 2030, the consultancy calculates.
These findings were shared as part of the launch of Mckinsey's Energy Industrialisation and Transition Index (IETI), which will be updated every six months.
“Portugal could be at the forefront of the reindustrialisation of Europe”, as “it has gigantic potential like it has never had in recent years”, said André Anacleto, partner at McKinsey, in the presentation of the index. One of the key advantages is the cost of energy: Portugal has the capacity to produce clean energy 20% cheaper than the European average, according to a report by ECO.
Thus, the energy transition, if used to reindustrialise the economy, could represent a 15% jump in GDP in 2030, compared to 2022, the consultancy calculates. In the same scenario, exports should increase by 20% and 300,000 jobs could be created, 60,000 of which will be qualified. “If we don’t move forward decisively, we are falling behind in capturing the opportunity,” stated André Anacleto.
The current weight of industry in the economy is 13.6% (2023 data), more than two percentage points below the EU average and “quite far” from the 19% in 1996. This, although investment in industrial fixed assets has grown gradually since 2013 and 14% in 2022 alone, reaching 12 billion.
Mckinsey points to an opportunity to invest in some emerging sectors, such as electric vehicles, batteries and even green steel.
Holding back the Portuguese industry is the lack of investment in research and development, “essential” to “maintain competitiveness”. In Portugal, investment in R&D grew by just 0.3 percentage points in the last decade (reaching 1.7% of GDP in 2022) and continues to fall short of the European target of 3%.
