Investment in Portugal fell 4.4% in 2022
Investment over 2022 fell 4.4% compared to 2019 with a medium-term impact of -8.8% because of the economic fallout from both the Covid-19 pandemic and the war in Ukraine.
The fall was almost three times greater than the Euro Zone average in 2022, and twice more in accumulated terms for the year.
This was the conclusion from the Ministry of Finances Office of Planning, Strategy, Evaluation and International Relations (GPEARI) from a study published in July.
Portugal suffered a considerable fall in investment compared to other member States in the euro area. When taken as a whole, the euro area counties lost 1.6% in 2022, while the accumulated figure to 2023 was -3.2%.
When qualifying the impact of the war in Ukraine on the Portuguese economy, the authors of the study reached the conclusion after looking at comparative metrics of forecasts from various national and international institutions before and after the war, and were able to estimate the macroeconomic impact of the war on the Portuguese economy.
In the case of investment, “The fall on the pre-pandemic trend is quite significant both for 2022 and 2023 with various explanations behind the fall including: an increase in uncertainty because of the conflict, constrains on supply chains, price inflation and scarcity of materials, as well as the successive interest rate hikes by the European Central Bank.
However, the impacts on Portugal’s GDP tell a different story in Portugal compared to the rest of the euro area with less disastrous results and with an improvement of 1.2% in Portugal, above initial expectations at the start of the war in February 2022.
However, for 2023 the accumulated growth of the Portuguese economy is expected to be more modest at only 0.7%, but better than the euro area average of -2.4%.