Portugal Economic Forecast

Portugal Economic Outlook

April 30, 2018

Data for the first quarter signals that economic growth, while still strong, likely moderated slightly from last year’s rate; in 2017, it shot up to a 17-year high on the back of soaring exports. The most notable signs of a moderation came from a slower pace of expansion in industrial output in the first two months of the year compared to the final quarter of 2018, along with a discernible fall in retail sales growth in February. Survey-based data reinforced the view of a cooling trend; economic sentiment continued to slide throughout the first quarter. Nonetheless, the economy remains resilient, alongside a record-low budget deficit. Prime Minister António Costa’s left-wing government has drawn accolades for the turnaround in growth, achieved while maintaining post-crisis fiscal discipline. On 13 April, Finance Minister Mário Centeno presented a 2018–2022 program aimed at fiscal stability, projecting a budget surplus in 2020 that if achieved would end 25 years of uninterrupted deficits.

Portugal Economic Growth

Another year of solid, albeit more moderate, GDP growth is expected in 2018. Growth should be supported by the thriving tourism sector, coupled with the ongoing recovery in the labor market underpinned by robust employment growth. This should buttress wages and keep private spending resilient. Met the why particular panelists expect the economy to grow 2.3% in 2018, which is unchanged from last month’s forecast, and 2.0% in 2019.

Portugal Economy Data

20132014201520162017
Population (million)11.511.411.411.411.4
GDP per capita (EUR)16,28316,64117,24117,749-  
GDP (EUR bn)170173180185-  
Economic Growth (GDP, annual variation in %)-1.10.91.61.4-  
Consumption (annual variation in %)-1.32.32.62.3-  
Investment (annual variation in %)-5.12.34.50.1-  
Exports (G&S, annual variation in %)7.04.36.14.4-  
Imports (G&S, annual variation in %)4.77.88.24.5-  
Industrial Production (annual variation in %)0.41.61.81.0-  
Retail Sales (annual variation in %)-1.51.11.72.9-  
Unemployment Rate16.514.112.711.2-  
Public Debt (% of GDP)129131129130-  
Fiscal Balance (% of GDP)-4.8-7.2-4.4-2.0-  
Money (annual variation in %)1.90.94.48.8-  
Inflation Rate (HICP, annual variation in %, eop)0.2-0.30.30.9-  
Inflation Rate (HICP, annual variation in %)0.4-0.20.50.6-  
Inflation (PPI, annual variation in %)-0.5-1.8-  -  -  
Policy Interest Rate (%)0.250.05-  -  -  
Stock Market (annual variation in %)16.0-26.8-  -  -  
Exchange Rate (vs USD)1.381.21-  -  -  
Exchange Rate (vs USD, aop)1.331.33-  -  -  
Current Account (% of GDP)1.60.10.10.8-  
Current Account Balance (EUR bn)2.70.10.11.6-  
Trade Balance (EUR billion)-9.6-11.0-11.5-11.8-  

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Portugal Facts

ValueChangeDate
Bond Yield2.02-1.90 %May 21
Bond Yield2.02-1.90 %May 21
Exchange Rate1.180.65 %May 21
Exchange Rate1.180.65 %May 21
Stock Market5,750-0.02 %May 21
Stock Market5,750-0.02 %May 21

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