Government admits growth over 5.5% in 2022

Portugal’s minister of Finance, João Leão has predicted economic growth that will equal or exceed 5.5% in 2022.

The minister said at a meeting of Eurogroup on Monday that growth had been so strong in recent months, that there was “room for such growth or even greater”.
In the provisional State Budget for 2022 that the Government had handed to the Portuguese parliament in October (it was rejected), the finance minister had forecast that Portugal’s GDP would grow 5.5% next year. Now, 2 months on, João Leão admits that the Portuguese economy could grow even more than he had originally thought.
“We know that other countries have had to take more stringent measures. In Portugal we don’t expect to take such severe measures, but think that GDP growth could even be above what the Government had predicted”, said João Leão, indicating that the Portuguese economy was experiencing a strong economy”.
João Leal nevertheless stressed that the context was “uncertain” which is why “humility” was needed since the pandemic “could yet surprise us”.
But while the government thinks that GDP could grow by more than 5.5%, the European Commission sets growth at 5.3%, the IMF gives a rather conservative estimate of 5.1% and the OECD sees the Portuguese economy growing by as much as 5.8%.
For the end of this year, the minister for Finances continues to project growth in the economy at 4.8%.
But he said that the labour market would perform “better than the Government had expected”. In the provisional State Budget for 2022, the Government estimates that the unemployment rate should be at 6.8% for 2021, but in October the rate was fixed at 6.4%.
“The unemployment rate is going down faster than expected. This year is will be below the Government’s initial forecast”, added João Leão, while emphasising that on the back of this positive development, the country will “once again fulfil its budgetary and budget deficit targets for this year.”