BoP revises Portugal’s GDP growth to 2.1%.

The Bank of Portugal (BoP) has decided to revise its growth forecasts for Portugal’s GDP downwards from 2.7% to 2.1% because of a slowdown in export orders and reduction in consumer spending.

On the other hand, inflation was revised upwards to 5.4% in 2023. According to the Economic Bulletin for October released on Wednesday, the Portuguese economy “should grow at a lesser rate than projected, with GDP variation rates of 2.1% in 2023, 1.5% in 2024 and 2.1%” in 2025”.
Inflation is now forecast at 5.4% revised upwards from 5.2% for 2023, 3.6% from 3.3% for 2024, and 2.1% for 2025.
This review is down to the rising cost of energy, reflecting the possible review of the price of petroleum.
Regarding investment, the BoP notes that this “will likely slow in 2023 to 1.5% growth against a more difficult financial backdrop with a slowdown in global demand”. However, for the next two years investment should grow 5%, “driven by an uptick in global demand and the allocation of European funds”.
As for the employment market, the prospects are more positive. The BoP forecasts that it should “remain buoyant” with more jobs and salary increases.”
The unemployment rate should be 6.5% this year, 6.7% next year and 6.9% in 2025.