OECD upgrades Portugal growth forecast to 2.5%

The OECD has joined the IMF and Brussels in doubling Portugal’s 2023 growth outlook from 1.0% to 2.5%.

The reason? Portugal’s export order books are more buoyant than initially expected. The OECD forecast was 1% of GDP in November to 2.5% in its most recent Economic Outlook released on Wednesday (June 7).
The forecasts are even more optimistic than the Government’s which in its Stability Programme 2023-2027 forecast 1.8% for GDP.
The OECD’s outlook now of 2.5% is forecast to fall to 1.5% in 2024. Despite inflation hitting consumer pockets hard, the “expenditure of the Recovery and Resilience Plan (RRP), budget support measures (Public Investment in Supporting Activity) worth 3.7% of GDP in 2023, also helped the situation”, stresses the OECD.
OECD forecasts for inflation are 5.7% in 2023 and 3.3% in 2024 which will lead to a reduction in the purchasing power of economic agents. (consumers). This will slow consumer growth. These forecasts are more pessimistic than the government’s which in the Stability Programme pointed to inflation of 5.1% in 2023 and 2.9% in 2024.