Title:
Key Drivers of Economic Growth in Portugal and the Eurozone

Authors:
Natália Teixeira, Portugal

Abstract:

This paper examines the influence of gross household disposable income, tax burden, and savings rates on economic growth in Portugal, providing a comparative analysis with the Euro Zone. Drawing on empirical data from 2000 to 2022, the study employs Pearson correlations, regression models, and ARIMA forecasts to analyse the relationships among these variables. The findings indicate a significant positive correlation between disposable income and economic growth, while Portugal's higher tax burden has a more pronounced negative impact on growth than the Euro Zone. Additionally, the research highlights the critical role of savings rates in driving economic growth, particularly in Portugal, where lower savings rates are partly attributable to the financial system's development. The results suggest that policies aimed at increasing disposable income, reducing the tax burden, and fostering savings could substantially boost economic growth in Portugal, offering insights into the broader determinants of growth in developed economies.

DOI: https://doi.org/10.51505/IJEBMR.2024.81017