Axel Bugge: Investors keen on Portugal but ordinary workers pessimistic of bleak year
PORTUGUESE consumer confidence is at record lows, unemployment at all-time highs and the country has launched the largest tax rises in living memory. Yet investors are snapping up its bonds and its international lenders are full of praise.
In perhaps the starkest example of the gap between renewed investor appetite and languishing economies, Portugal has started 2013 on its strongest footing since it was bailed out in mid-2011, with confidence boosted by hopes it will relinquish its lifeline from the European Union and IMF as scheduled.
Investors bought €2.5bn of Portuguese five-year bonds last week in the country's first issue since its bailout, returning it to the market many months earlier than planned. Struggling Spain and Italy have benefited from similar bond market largesse.