Economy will grow less than expected, Bank of Portugal. This year’s projection drops to 4.9% – Observer
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The Bank of Portugal cut the projected growth of the national economy as much for 2022 to 2023, as Governor Mário Centeno had already anticipated in an interview with the Observer published on Friday. The growth forecast for 2022 was revised down by nearly one percentage point to 4.9%, against the 5.8% estimated in December. The forecast for the rise in prices more than doubled, from 1.8% to a 4% fee.
The Portuguese economy “maintains a growth profile in 2022-24, in a Increased uncertainty associated with the conflict context in Ukraine“, writes Banco de Portugal in the statement on the March Economic Bulletin, presented at a press conference with Mário Centeno.
“Gross Domestic Product (GDP) grows 4.9% in 2022, 2.9% in 2023 and 2.0% in 2024benefiting from the greater receipts of funds from the European Union and from the maintenance of financial conditions of the European Union2, which the Bank of December once affirmed of GDP expansion from 2023.8% to 3.1% in 2023 .
The most drastic of the statistics is, however, in the tax. The price increase offer increases in 2022 from 1.8% to 4% “reflecting the rise in the price of changes in principles and the restriction in global supply chains”, Banco de Portugal, which says this effect of the correction will take place in 2023, with the adjustment rate of the reduction to 1.6% in 2023 (and the same in 2024).
The Invasion of Ukraine by Russia contributes to limiting economic dynamism and to intensifying the Bank of Inflationists”, he says.
AN rise in energy prices is estimated at 14.2% (to 2022), more than doubled from the 6.3% that was estimated in a month of December, before the conflict in Ukraine that started to rise from the first energy raws. However, even with the price of goods, the direct price of the rise in energy prices, Portugal should have an increase of 3.1% in the consumption index.
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Regarding the settings for GDP, the one that puts the most negative pressure on growth is the private consumption, which will rise 3.6% in 2022 (less than the 4.8% previously forecast). already the public consumption will have a minimized contributor, with a growth of 1.5%. The greatest positive impetus will be provided by gross fixed capital formation, in simple terms the Investment., which will jump 9.2%, according to the Bank of Portugal (7.2% was forecast in December). Also as exports It will perform better than expected: up 14.2% in 2022, which includes a forecast of recovery in tourism.
they are financial projections that “assume that there is no escalation of the conflict and that these offers of global factors and restrictions dissipate in the medium term”, emphasizes supervisor english.
The revision of the final estimates by Banco Portugal follows the new projections released by the ECB on 10 March. At that time, economists at the ECB significant2, predict a growth of the domestic product (GDP) of the euro zone in 202, below the 4.2% forecast in December. But existing indicators continue to point to a “robust” reform of the economy, said President Christine Lagarde, who recalled that a pandemic has had a minor negative each time.
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For 20, the ECB forecast was also32: 2.8% (versus.9% forecast in December). In relation to 2024, the same 1.6% will remain. The economy’s “Eurozone risks” “hang on the negative side, are more likely to surprise than on the positive side, alongside the ECB.
About inflation, as expected, as they were revised upwards – and it was not little. In 2022, inflation will average 5.1%, ahead of the ECB, two and a half times the central bank’s medium-term objective. A previous forecast was 3.2%.