Large companies more confident on investment prospects

Despite economic indicators for the last quarter of 2022 and the first quarter of 2023 reporting a fall in investment, Portugal’s large companies are more optimistic about the rest of 2023 than they were in October.

This is according to the latest indicators on he business and economic climate from the association Business Roundtable Portugal (BRT).
In a report handed to the Prime Minister António Costa on Friday by the association, whose members include the 42 largest companies in Portugal, the prospects for 2023 have been revised upwards with the companies believing that the Portuguese economy will enjoy modest growth, but not as high as was seen in 2022.
Compared to October when the economy was expecting stagnation in terms of investments, the CEOs and presidents of these 42 companies see greater stability and have given 0.5 points on a scale between -2 and +2 with -2 meaning plummeting investment and 0-1 meaning a stable outlook on investment.
The opinions were collected at the end of March and beginning of April, before the release of the national statics institute’s preliminary forecast for Q1 2023 and which saw expectations for growth above those forecast. (1.6% Q-o-Q), but with expectations of a continued fall in investment as had been seen in Q4 in 2022.
Last year was marked by a strong contraction in investment and Portugal’s Ministry of Finances expects in its Stability Programme a fall in private investment which will be offset by public investment, according to the report which projects a GDP growth of 1.8% in 2023.
Fo this year, the Government has revised its growth expectations for the economy from 3.6% to 3.4%. Nevertheless, they are better than projections from the OECD, the Bank of Portugal, and the Council for Public Finances.
BRP members – 38 were quizzed in the study — have ruled out the prospect of reducing investment in their own businesses. The report shows “investment reflected an improvement for the companies that are members of the BRP Association, foreseeing a slightly more favourable outlook for the next six months with the index expecting 0.37 points for October.
However, for the economy overall, the prospects remain negative with those canvassed predicting a downturn in activity but less than expected six months ago.