The governor of the Bank of Portugal, Vítor Constâncio, said last week that the economic conditions in Portugal were worse than expected.
However, he said that while they were worse than announced on January 6, they were not as bleak as painted by the European Commission which was “excessively negative for Portugal in terms of private consumption, very pessimistic and without foundation”.
The European Commission predicts a fall in private consumption by 0.2 per cent and has revealed that there will be a contraction in the GNP by 1.6 per cent in 2009.
But, according to the Bank of Portugal predictions, the economy is likely to contract by 0.8 per cent in 2009.
Vítor Constâncio also said that inflation would be ‘very low’ which would contribute to increasing the real value of family disposable income and expressed the hope that private consumption would increase ‘somewhat’.
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