Portuguese economy to follow Eurozone trend in 2019/20
The Portuguese economy will continue to mirror the growth trend in the rest of the Euro Zone in 2019 and 2020.
Presenting its Winter Forecast for Portugal it predicted that Portugal’s growth would continue to converge with its European partners at 1.7% over the next two years, above the Euro Zone overall forecast of 1.3% in 2019 and 1.6% in 2020.
The downward review of Europe’s growth over the next two years is essentially down to Geopolitical uncertainties combined with domestic factors damaging prospects for growth in the main EU economies.
However, economic growth forecasts for the Portuguese economy for 2019 (-0.1 p.p. compared to autumn 2018 forecasts) are significantly less than that of the Euro Zone (-0.6 p.p.).
For Portugal, in addition to a moderate deceleration in overseas demand and a slowdown in exports, the European Commission highlights the positive dynamic of private consumption and an acceleration in investment as factors supporting growth in the short term.
Portugal’s overall positive trend has been seen in the employment market which has grown at a sustainable rate (+320,000 jobs over the past three years) and a fall in unemployment which together have been among the highest indicators in the Euro Zone (-285,000 unemployed since December 2015) and a reduction in the jobless rate by 5.5 p.p.).
Employment grew more in Portugal than in any other Euro Zone country (7.2% in Portugal between 2015 and 2018, compared with 4.5% in the Euro Zone). Unemployment in Portugal fell 45% from 2015 to 2018.