Recovery of tourism sees new positivity over growth

European Commission estimates 5.8% lift in GDP – almost 1% more than government budget

New economic forecasting by the European Commission has seen Portugal’s GDP this year grow almost a percentage point more than that estimated in the 2022 State Budget.

The main reason is the welcome return to pre-pandemic levels of tourism.

Explain reports, “in spite of the war in Ukraine and the escalation of inflation, European economists estimate that Portugal will grow 5.8% in 2022, when in February they estimated 5.5%”.

These “spring forecasts” have been published today, giving wind to the wings of the State Budget, which is technically still ‘under debate’ (with final voting due on May 27).

Expresso explains, Brussels’ predictions are “well above the forecast of 4.9% that the government entered in the State Budget”. They are also the “highest among the main national and international institutions that monitor the Portuguese economy – the IMF, for instance, having set growth forecasts at just 4%.

In other words, it’s ‘good news’, and means that Brussels sees Portugal ‘recovering’ much more quickly than the eurozone as a whole, where growth forecasting is stuck at 2.7% this year.

As for Portugal’s budgetary planning on the deficit (a deficit of 1.9% this year), thinking is ‘aligned’: Brussels has improved its overview in the review released today by 1.5 percentage points – while it sees inflation ‘reaching 4.4%’ this year (up till now it has been running higher), “below the 6.1% level of the eurozone”.

For 2023, the Commission is predicting growth in Portugal of 2.7%, adds Expresso.