Economists say latest lockdown will hurt economy less
Portuguese economists consulted by an online news source believe that the latest lockdown measures ordered by the government will have a less damaging effect on the economy than the previous April confinement.
The economists consulted by ECO online, believe that the contraction in the economy should not be as much as 6.5% of GDP per month of lockdown as predicted by the then minister for the Economy, Mário Centeno back in March 2020.
The reason is that one year on, both companies and consumers are much better prepared to deal with the situation, Government and EU credit lines have been put in place, and there is the notion that the pandemic is something transitory.
“The minister of Finances probably is not that far off from reality when he made the estimate he did,” José Maria Brandão de Brito, chief economist at the bank BCP said, referring to the aggressive 45-day lockdown in March and April when the Portuguese economy contracted around 8%. “The economic impact this time around will be a lot less than back in the Spring,” he said.
Paulo Rosa, senior economist at Banco Carregosa said, “The impact should be less than last year because the suppositions at that time were different and things were stricter.”
The same opinion was shared by Rui Constantino, chief-economist at Santander and Paula Carvalho, economist at BPI/CaixaBank, recalling that in 2020 the lockdown and closure of borders happened simultaneously.
Constantino predicts a fall of 6-7% of GDP for the first quarter of 2021 on the fourth quarter of 2020, which will represent a like-for-like fall of 13.9% in the second quarter of 2020.
“The effect on the economy will be less serious than in the period of March and April 2020,” said Paula Carvalho, without proffering numbers.
In terms of the same period in 2020, the Santander economist predicts a fall of 10% in an initial estimate and said other factors would come into play such as the duration of the lockdown and similar measures in other European countries,” said Rui Constantino.
The BPI/CaixaBank economist predicts that this new confinement will have a negative impact, but a more contained one in terms of growth forecasts for the year since a stronger recovery in the second half of 2020 is expected as the pace of vaccination picks up.
Nevertheless, the expectation is that the first quarter of 2021 will continue to suffer the economic contraction of the fourth quarter of last year.