Bank of Portugal forecasts 2.7% growth

The Bank of Portugal has revised Portugal’s growth upwards by 0.9% to 2.7% – three times higher than the EU average.

Growth had been forecast at 1.8% for 2023 in March, The increase in growth is driven by both exports and investment. The forecast is the most optimistic from among all of the various international institutions including the EC and OECD whose forecasts were 2.5% and 2.4% respectively.
And Portugal’s GDP growth rate is on track to be three times the EU average which the European Central Bank forecasts to be 0.9%.
Both 2024 and 2025 also have better forecasts than the EU average with economic growth at 2.4% and 2.3% respectively according to the Bank of Portugal’s Economic Bulletin for June, above the 2% that had been forecast for the next two years.
In a communiqué, the Bank of Portugal underscores the “structural changes” that were made to the Portuguese economy in recent years and have helped sustain economic activity against a backdrop of great uncertainty because of the war in Ukraine, galloping inflation and tight monetary policy.
“The increase in the qualifications among the population, financial stability – reflected in a reduction in credit costs and an increase in family and company savings – and changes and improvements within Portugal’s companies network resulted in a more robust economy that was able to meet international demand and generate wealth and sustainable internal demand”, states the central bank led by Mário Centeno.
On the other hand, “the employment market has remained solid as a result of economic performance while the take-up of EU funds by the private sector, despite still being limited, “sustaining productive investment and mitigating the impacts from higher interest rates”. Portugal’s unemployment rate will likely stabilise at 6.7%.

Image: Lusa – António Pedro