Finance minister welcomes latest growth figures

Portugal’s Finance minster, Fernando Medina has welcomed the latest statistics from the national statistics institute INE on growth and inflation saying they offered “good prospects for 2023”

Growth Domestic Product (GDP) from January to March showed an increase of 2.5% year-on-year and 1.6% quarter-on-quarter, while the evolution of the Consumer Price Index (CPI) showed a fall from April’s 5.7% to just 4% this month.
Medina explained that the GDP figure stands as  “confirmation of the growth of the Portuguese economy which was essentially driven by exports”: “Exports of services, especially tourism, but also exports of goods, that is, Portuguese industry showing a very significant improvement in capacity regarding its export markets, thereby contributing our country’s increased wealth”, he told the news agency Lusa.
As to the fall in inflation in May, according to a back of the envelope estimate, Medina pointed out that inflation had already been falling for several months, reinforcing the expectation that we will soon have inflation below 3% “which is very important for families as is tends to stabilise their prospects regarding purchasing power and the decisions they have to take,” he said.
“What this data shows is that we are on the road to a more stable, predictable and less turbulent situation in terms of the prices outlook than the one we had last year, and that is important,” he stressed, adding: “The outlook we’ve had for the past few months with inflation below 3% becomes firmer today”.
Portugal’s finance minister also referred to INE data on the labour market which “shows that not only does employment continue to grow (the employed population in Q1 of this year, compared to last year, continues to grow), but also salaries: national insurance contributions in the first quarter of this year are up 8%”.
It means that there is “a very important group of Portuguese people (who) are enjoying salary increases that are already above the inflation forecast for this year, which is important to mitigate the loss of purchasing power that they suffered throughout 2022”, said Medina.
On “family confidence indicators”, these had increased in May to their highest point since February 2022 (when the world economy was battered by Russia’s full-scale invasion of Ukraine).
Medina said that he believes improved confidence “also results from the “important response” that the government has given “regarding support and (cash) transfers to families”.
His actual words were: “I highlight here the importance of budgetary policy and of what was done from the point of view of transfers and support to families, because this support to stabilise incomes and reduce the loss of purchasing power, which obviously the context of inflation brings, was very important in stabilising incomes and family expectations,” he said.

Image: Lusa.