Portugal’s economy to grow 1.7% says Brussels

The European Commission has forecast that Portugal’s economy will likely grow by 1.7% this year with a budget surplus of 0.4%.

The estimate from its spring forecast published today (Wednesday) is more optimistic than the forecast from the State Budget of 2024 and the Stability Programme which point to a growth of 1.5%, below the forecast from the Bank of Portugal. (2%). The EC projects that Portugal will continue to post surpluses in 2024 and 2025.

The forecast for this year is an upwards revision on the 1.2% that had been forecast in the EC’s winter statement. Brussels predicts that Portugal’s GDP will grow 1.9% in 2025.

“Economic growth in Portugal is likely to be moderate in 2024 before recovering again in 2025, driven by private consumption and investment”, according to the commission in its report.

The inflation rate in Portugal is forecast to be 2.3% this year and 1.9% next year.

As to public accounts, forecasts are running at 0.4% for this year and 0.5% for next. The previous minister of Finances Fernando Medina suggested a surplus of 0.2% in the State Budget for 2024 while in the Stability Programme from the current minister of Finances, Joaquim Miranda Sarmento, the projected surplus is 0.3%.

Regarding Portugal’s public debt, after falling by 13% in 2023 to 99.1% of GDP, this is forecast to continue to fall at a constant but slower rate to 95.6% in 2024 and 91.5% in 2025.