Economic recovery ‘solid’ says Oxford Economics

 In Economy, News

An economist for Oxford Economics believes “internal demand” will drive economic recovery in Portugal this year and next.

But Ricardo Amaro, senior economist and economic forecasts consultant warns that although Portuguese tourism showed some recovery in the spring, the increase in the number of cases of Covid and restrictive measures from Portugal on the important civil aviation market were “pretty negative” and show that the recovery in this area will be gradual.
In an interview with Jornal Económico, the economist from Oxford Economics estimates that GDP will grow 4.3% this year and 5.4% in 2022.
The economist was speaking in the run-up to a webinar ‘Portugal: turning the page or a cloudy horizon,’ which will take place tomorrow.
Amaro said that the Delta variant “brought new challenges for Portugal,” but continues to believe that the Portuguese economy will return to its pre-crisis levels in the second quarter of next year.
The economist says that the data for the second quarter of this year from the European Commission and Portuguese National Statistics Institute (INE) were “encouraging” with overall increases in April and May.
Trade and retail data point to a strong recovery in consumer spending in this quarter, perhaps in the order of 7/8% in chain.
Amaro says that consumer spending will continue to be sustained by savings accumulated during the pandemic. “We estimate that between last year and the beginning of this year there was a savings surplus of around €10Bn – the equivalent of almost 5% of annual GDP, part of which will be spent as the barriers to consumption start to fall”.
The Oxford economist says that investment was resilient during the crisis and this will continue to provide a positive contribution to the economy as will the Recovery and Resilience Plan. Both exports and important will also recover in a significant way, but “we forecast a more modest net effect on GDP given that the growth rate of exports will differ little from that of imports”.