Economists deliver good news (at last) for Portugal

In a week when international media makes much of prime minister Pedro Passos Coelho’s tax ‘fiasco’ – and how it is impacting on support for his ruling PSD party – economists have delivered some “good news” at last, suggesting that growth this year may well be in line with government forecasts.

A Bloomberg poll of 22 economists has seen the “unanimous” response that the economy will grow “slightly, but more than previously expected”.

The ‘slightly’ is translated into “1.5% of GDP this year, as opposed to the 1.3%” initially suggested.

The boost comes from the drop in the price of oil and the huge programme of quantitative easing currently being orchestrated by the European Central Bank (ECB).

As Bloomberg points out, the news sees economists accepting the mathematics of Portuguese government’s 2015 State Budget – something that the ECB, IMF and European Commission had viewed with continued scepticism.

Even better, the economists polled apparently forecast a 1.8% growth for 2016 – two decimal points better than the 1.6% previously forecast.

But the good news is tempered by the fact that Passos Coelho’s tax furore has seen support for his party slump as Portugal gears up for months of pre-election fever.

According to Reuters news agency, the PSD is now “far behind the opposition Socialists after the prime minister came under fire for failing to pay taxes on time”.

Indeed, the nation’s media is focusing increasingly on the upcoming elections with newspapers suggesting the battle will be Somme-like when it comes to throwing up dirty laundry.

A leader column in the popular tabloid Correio da Manhã predicts “all manner of insinuations” to be launched, principally over the internet.

“No one should be fooled,” wrote deputy news editor Miguel Alexandre Ganhão over the weekend. “It will be in cyberspace, through professionally-manipulated blogs, that the scandals will appear.”

The fight will be “long and dirty”, he stressed, with everyone on the lookout for “the weakest links” – “a youthful indiscretion, a frustrated love affair, an overcome vice or a hidden shame”.

By NATASHA DONN [email protected]