Bank of Portugal predicts 2% growth for 2019
The Portuguese economy should grow 2% this year, despite a falloff in exports and consumer spending.
The forecast comes from the Bank of Portugal which puts Portugal’s projected growth rate slightly above the government’s own predictions and justified on the basis of a review in the way GDP is calculated by the National Statistics Institute.
In the bank’s Economic Outlook Bulletin for October published on Tuesday, the body led by Carlos Costa explains that the greater GDP growth rate compared to projections of 1.7% in June “largely results from the adoption of a new range of national accounts published recently by the INE”.
Under the new way of calculating GDP, Portugal’s economic expansion was reviewed upwards to 1.9% in 2016, 3.5% in 2017 and 2.4% for 2018.
“The use of this new information has significant implications on growth levels and the intra-annual profile of the main macroeconomic indicators meaning that the forecast is not directly comparable with figures published in June”, states the Bank of Portugal.
In June the regulator forecast growth of 1.7% based on all the GDP growth indicators with the exception of public consumption. In the current scenario forecast by the bank, despite a slight slowdown in the Portuguese economy compared to recent years, the economy should actually grow one-tenth above the target of 1.9% set out by the Government in its Stability Programme sent to Brussels in April.
After growing 2% in the first half of the year, the BdP estimates growth in the national economy of 1.9% for the last six months of the year with the exception of Gross Fixed Capital Formation which looks set to fall from 9.5% to 5%.