Portugal Economic Forecast

Portugal Economic Outlook

July 24, 2018

Recent data points to a healthy, but relatively slower, pace of economic expansion in the second quarter amid a broader slowdown across the Eurozone. Slower export growth in May against the backdrop of escalating global trade tensions was likely a factor in the drop in industrial production in the same month. Despite the slowdown in exports, the external sector contributed to growth as imports decelerated more sharply than exports. While retail sales picked up steam in May amid stronger consumer confidence following a considerable loss of momentum in April, the retail sector likely lost ground in June amid weakening in confidence among consumers. Business sentiment climbed throughout the quarter, thanks to a more favorable outlook on the construction and public works, and service sectors. Moreover, growth continued to be supported by the ongoing the housing boom: House prices increased more than 12% in the first quarter from a year earlier.

Portugal Economic Growth

Another year of healthy economic growth is expected in 2018, thanks to higher foreign investment, the flourishing tourism industry and resilient private consumption supported by strong job creation that should lift wages. A greater inflow of foreign investment is also expected to continue driving the housing boom. Nevertheless, growth is expected to moderate from the previous year, owing to an anticipated slowdown in domestic demand. FocusEconomics panelists expect the economy to grow 2.2% in 2018, which is unchanged from last month’s forecast, and 1.9% in 2019.

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Portugal Facts

ValueChangeDate
Bond Yield1.75-1.90 %Aug 07
Exchange Rate1.160.65 %Aug 07
Stock Market5,631-0.02 %Aug 07

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