Portugal’s economy has definitely ‘recovered’ in the last three-month period, though the jury is out on exactly by how much.
Says Expresso today, economists ‘on average’ saw an expansion of 7.6% in relation to the previous trimester (which covered the pandemic lockdown) – and a fall of 10.2% when compared to the same period in 2019. But there are huge ‘divergencies on the dimension of the recovery’.
The “biggest doubt resides in its buoyancy”.
Projections by various sources (BPI, the Forecasting Lab/ NECEP of the Catholic University of Lisbon, ISEG (the Economic Analysis Group), Millennium bcp and Santander differ wildly – though they are all fairly agreed on the fact that whatever happens will still fall far short of levels ‘pre covid’.
Indeed, there are those who think GDP will remain in negative territory until the first three month period of 2021.
The Bank of Portugal however is hopeful. Upgrading its forecast of GDP contraction from 9.5% to 8.1%, governor Mário Centeno has stressed that he sees “a rapid recovery” (if not ‘V-shaped’), “sustained by policies and preparation of the Portuguese economy to respond to the challenges”ahead.
Indeed, Centeno went so far as to dub the 3rd trimester recovery as “very strong”.
Tourism however played a key role: while July was disappointing, August was a great deal better. But the next three month period will have negligible tourism – though better possibly than the three months between April and June.
Exports however are ‘picking up much faster than imports’, says Expresso. Data from INE (national statistics institute) shows exports in August fell by just 1.4% compared to the same period in 2019. In other words, the change was ‘residual’. In July they had contracted by 7.1%. Imports however fell by 11.6% in August, and 20.4% in July.
It’s simply the ‘unknown’ that divides economists with the Catholic University’s Forecasting Lab/ NECEP being particularly pessimistic about the evolution of exports – especially when it comes to tourism – and the whole issue of internal consumption also raising questions.
Sales of cars are well down, as are people’s ‘habits’ of eating out or spending money outside the home.
Says the ISEG, in sectoral terms, “among most positive aspects is the strong recovery of industrial production and turnover in retail trade”. Less pronounced is the turnover in services”.
Meantime, the situation of the pandemic continues to hog headlines, with case numbers rising exponentially.
Virologists have stressed this is only to be expected given the opening up of the economy and schools. Health authorities insists they are better prepared, with campaign hospitals set to return during the winter if numbers entering hospital spike.
For now roughly 70% of beds in intensive care are occupied by Covid patients which health secretary António Lacerda Sales stresses leaves ‘room for comfort’.
“We are well prepared and even with these numbers we have capacity and space for comfort”.
The north and Lisbon areas remain those with the highest case numbers and majority of ‘deaths’ – though these deaths are predominantly in the 75-plus age group.