Portugal’s GDP better than forecasts

Portugal’s finance minister put a slight gloss on an otherwise dark landscape as the National Statistics Institute confirmed Portugal’s debt levels had reached 135% of GDP and GDP had fallen by 7.6% — the worst recession in Portugal’s democratic history.

João Leão said there was some “moderate optimism” and the economy had “performed better” in 2020 than expected.
On the other hand, there was a “sharp contraction” and 2021 started off on the left foot with the new State of Emergency which will have consequences for Portugal’s GDP and recovery.
“Despite a sharp fall in GDP, the evolution reflects an improvement compared to the government’s own forecasts in the State Budget for 2021 (8.5%),” he said.
Nevertheless, it was the sharpest fall in GDP since the 1974 Carnation Revolution which ended over 40 years of dictatorship.
In the second half of 2020 the economy recovered on the first half with growth of 5.1% after the first half suffering an abrupt fall in GDP and economic activity without precedents caused by the first lockdown in March and April.
Moreover, compared to the same period in 2019 (in homologous terms), Portugal’s GDP continued at 5.9% beyond the first quarter.
However, the Finance minister warned, “The new general confinement decreed at the start of 2021 will have a negative impact on the economy in the first months of the year, which will imply less favourable annual evolution than had previously been anticipated.”
The good news is that with the simplified layoff regime, the rate of unemployment in Portugal should not go beyond 8.7%.