Companies Gross Value Added up 7.5%
The Gross Value Added of Portugal’s SMEs will grow 7.5% this year according to forecasts from the European Commission that points to inflation as one of the main reasons behind the growth.
Nevertheless, compared to last year the GVA is likely to be down. Gross Value Added (GVA) is the value that producers have added to the goods and services they have bought. When they sell their wares, producers’ income should be more than their costs, and the difference between the two is the value they have added. Companies naturally offset inflation by putting up the prices of final goods and services.
The data is in the annual report from the European Commission’s Common Investigation Centre that looks at the performance of SMEs at a European level in 2022 and 2023.
The document indicates that last year the GVA of national SMEs in the non-financial sector rose 11% which was the 6th highest increase in the EU.
This year the growth is not predicted to be as strong as last, but Brussels predicts that the performance of Portuguese SMEs will continue to be positive and above the average of the 27 EU member States (5.2%), like last year.
But the EC has warned that the “inflationary pressure in the EU is clouding the real picture” of just how financially robust companies actually are because the GVA of companies has “literally been inflated” by the increase in prices.