best growth forecast for Portugal to 5.5% this year – Conjuntura Brussels
The European Commission has revised upwards its growth forecast for the Portuguese economy this year. Instead of the 5.3% they expected in November, Brussels is now pointing to a 5.5% rise in GDP. Still, the rise in Covid-19 infections in the first few months of the year should improve the pace of the first quarter.
“Growth of 5.5% is expected in 2022 and 2.6% in 2023”, reads the European Commission’s Winter Forecast report, published this Thursday and presented in Brussels. In view of the decisions made in November, the numbers are perspectives for both this best year and the next (2.4% was expected in 2023).
Comparing with the other bodies that monitor the Portuguese economy, Brussels sees Portugal growing above the eurozone average, but it remains, even so, among the most cautious. The numbers for 2022 still match the government’s forecast, but the prime minister signals this Wednesday that he is preparing to review his macroeconomic scenario. The OECD, the last two reference institutions for Portugal (in December) refer to 5.8%.
GDP only reaches pre-pandemic level in the second quarter
Expert experts explain that domestic demand should contribute years to aid growth in both years, helping to aid the Recovery and Resilience Program. In 2022, external demand should also make a positive contribution, he hopes, with the recovery of tourism. Then, in 2023, it will become neutral.
From the beginning of the marked expansion of economic activity, the first quarter will mark a new slowdown in the pace of expansion of economic activity. Due to the increase in the number of cases of covid-19, with a further drop in international travel, the national economy will not grow more than 0.5% in the first quarter, according to experts.
The crisis is that then, in the second quarter, after this wave of covid-1 is over, growth accelerates, with the economy reaching its pre-1 level. This expectation is a little more optimistic than a little heavier still this Wednesday by Governor Banco de Portugal: Mário Centeno said he expects a recovery of the pre-covid GDP level in the first quarter.
The European Commission also points out that the risks to Portuguese growth are in the direction and are associated with the evolution of the pandemic: an increase in the pandemic framework could again accompany tourism tourism, taking strength from growth.
Recovery goes a little more than half
Last year, the national economy recovered “slightly more than half the level of GDP in Brussels that it lost in 2020, when it fell by 8.4%”, he says. This recovery has been uneven: goods while investment and exports have already surpassed their intensive pre-pan levels, private has advanced at a “slightly slower slower pace, as contact services struggled for most of the year “, explains the Commission.
Already as exports of repair services and reduction of difficulties “in the second half of the year, continued to further reduce their pre-pandemic level”, due to the difficulties of tourism, they add.
(news in update)