Exports expected to fall in 2024

Falling exports may mean that Portugal’s economy will have to be driven by internal demand in 2024.

The Portuguese economy is only expected to grow 1.2% in 2024, less than forecast by the State Budget 2024 because of signs of slowing exports, continued uncertainty over two wars — the Israel War against Hamas and the Ukraine war, as well as mounting tensions in the Red Sea. This and looming elections in Portugal could all dampen the economy in the first half of this year.
In December, the Bank of Portugal revised Portugal’s economic growth downwards from 1.5% to 1.2%.
Nevertheless, the Portuguese economy has started off the year with an external surplus of €7.5Bn, which compared to a deficit of €600 million in 2022.
In November 2023 alone, Portugal’s balance of payments (current and capital) was €722 million, up €1.082 million on the same month in 2022.
However, the balance for goods and services enjoyed only a slight increase of €9 million, but better than €-920 million for the like-for-like period in 2022.
The poor result was down to a deficit in goods of €594 million to €1.758Bn, due to an increase in exports of €120 million and a reduction in imports, by €474 million.
A surplus in the balance of services increased 7.8% while imports fell 3.9%. The Bank of Portugal explains that the increase in exports was mostly down to the contribution of travel and tourism (+€138 million), which totalled €1.367 million. This was the highest value for the month of November since records began.
However, Portugal will likely grow less in 2024. IMF, BoP, EU and OECD estimates believe that Portugal’s economy will still grow more than the EU average, but less than in 2023 as high interest rates and global insecurity continue.