Portugal’s economic freedom score is 64.4, making its economy the 62nd freest in the 2010 Index. Its score is 0.5 point lower than last year, with reductions in five of the 10 economic freedoms. Portugal is ranked 28th out of 43 countries in the Europe region, and its overall score is above the world average.
Reforms have modernized and diversified the Portuguese economy’s productive base. The services sector is now the largest source of employment. Business formation is more efficient and streamlined. Consolidation and restructuring have increased efficiency in the financial sector, which weathered the global financial turmoil relatively well. The judiciary is independent and free of corruption, although resolution of cases is slower than the EU average.
Portugal’s overall economic freedom remains limited by high government spending, low fiscal freedom, and a rigid labor market. Reforms in public finance administration are ongoing. The deficit had decreased to less than 3 percent of GDP but has been rising in recent years. The labor market is highly regulated.