This Friday, the Bank of Portugal (BdP) maintained its growth forecast for Portugal’s economy for this year at 2.1%, but slightly revised down next year’s forecast to 1.2%.
In its December Economic Update, the organization led by Mario Centeno forecasts Portugal’s economy will grow by 2.1% in 2023, forecast growth to slow in 2024 to 1.2% and rebound in subsequent years to 2.2% in 2025 . and 2.0% in 2026.
In October, he pointed to rates of 2.1% this year, 1.5% in 2024 and 2.1% in 2025.
Sustained growth will come from dynamism in investment and exports, while “private consumption and government consumption are expected to continue to lose weight.”
Gross fixed capital formation is expected to accelerate to 2.4% in 2024, rising by 5.2% and 4.1% in the next two years, while exports are expected to grow at a more subdued pace than in previous years (on average 3.4%, in 2023-2026) due to a decrease in the dynamics of external demand.
It also predicts that private consumption “should grow moderately by 1% in 2023-24 and then by around 1.6% in the context of rising real disposable incomes.” The savings rate is expected to increase and remain above 8% in 2024.
The BDP emphasizes that “the labor market continues to present a favorable situation, despite almost stabilizing employment, with real wages expected to rise” and forecasts an unemployment rate of 6.5% this year, from 7.1% in 2024 and 7. 3% in 2024. 2025.
The central bank explains that economic growth stagnated in the second and third quarters of 2023 and is expected to maintain low growth in the fourth quarter.
“Recent activity dynamics reflect weakness in external demand, the cumulative effect of inflation and greater restrictive monetary policy, which has affected the financing conditions of economic agents,” the report explains.
The institute, led by Centeno, highlights that rising interest rates are having a faster negative impact on the industrial sector, with services showing greater resilience.
“This resilience in services has helped maintain a favorable labor market despite some recent slowdown in employment,” he says.
On a quarterly basis, growth is forecast to recover “very gradually through 2024.”
Author: Lusa
Source: CM Jornal
I’m Tifany Hawkins, a professional journalist with years of experience in news reporting. I currently work for a prominent news website and write articles for 24NewsReporters as an author. My primary focus is on economy-related stories, though I am also experienced in several other areas of journalism.