BdP warns of 4 percentage point fall in GDP in spring bulletin

The Bank of Portugal has warned that rising energy costs, supply chain problems, widespread sanctions against Russia over the war in Ukraine and a climate of general uncertainty could all contribute to Portugal seeing a fall in GDP of up to 4 percentage points.

The projections, which have changed dramatically since January 2022, are expected to be made in its updated economic forecast which will be out on Thursday.
In an interview with the online news source Observador, the Governor of the Bank of Portugal, Mário Centeno, signalled that growth would be revised downwards.
Centeno said that a downwards revision was “only natural” and that its extent would depend very much on the length of the Ukraine conflict” and “to be honest it is very difficult to predict outcomes”.
The upwards revision of GDP made by Portugal’s statics institute INE which had forecast a provisional growth of 4.8% and an actual growth of 4.9% for 2021 will require a downwards adjustment for Q1, 2022.
“Taking all of the current situation into account, the data for 2021 alone would require a downwards adjustment of four decimal points in growth for 2022.” He said.
In its economic bulletin, which had been released in December, the Bank of Portugal’s forecast had been 4.8% for 2021 while it had revised its growth forecast from 5.6% to 5.8% for 2022. That might now be 5.4%.