Growth forecasts are UP, unemployment is down

The good news is that the Bank of Portugal has “upgraded its forecasts for economic growth between 2017-2019”.

Projections published yesterday (Wednesday) point to GDP growth of 1.8% this year, 1.7% in 2018 and 1.6% in 2019.

Expresso explains that these new values represent a respective percentage point increase of 0.4 , 0.2 and 0.1. They also lend credence to the path adopted by the country’s Socialist executive.

Speaking to Bloomberg in London yesterday, finance minister Mário Centeno stressed that Portugal today is “a very different country to the one it was before the debt crisis”.

Despite the fact that “the Big Three” ratings agencies – Moody’s, Fitch and Standard & Poor’s – still classify Portugal at “rubbish level”, Centeno intimates that this could all be about to change.

The labour market is dynamic, he said. Unemployment is down (Bank of Portugal forecasts point to below 10% by the end of this year), and investment is growing.

Indeed, Centeno told Bloomberg that as far as he is concerned economic growth this year “could approach 2%”.

BdP meantime suggests exports could go from 40% of GDP in 2016 to 46% by 2019. According to Expresso, the figure was just 31% in 2008.

But the central bank is not turning cartwheels. Its latest announcement warns that Portugal’s growth is in fact in line with that projected for the eurozone as a whole, and as such this will still leave the country growing “less than necessary” to keep up.

According to the institution lead by Carlos Costa, the ‘good news’ translates into the country having spent a decade returning to the GDP it enjoyed before the start of the economic crisis.

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