Portugal Economic Forecast

Portugal Economic Outlook

January 29, 2019

The economy seemed to remain downbeat in the final quarter, following the third quarter’s marked deceleration in growth which was depressed by falling exports. The external sector continued to perform poorly amid a wider slowdown in the Eurozone, with exports contracting, on average, in the first two months of Q4. Consequently, the current account swung to deficit in the January–November period from a surplus in the same period of last year. Moreover, industrial output continued to decline in October and November. Adding to the stream of grim data, consumer confidence remained in pessimistic territory and business sentiment continued to weaken in the final quarter. Ahead of elections to be held later in the year, the government approved a 10-year National Investment Program on 10 January, which will pour EUR 20 billion into transport, energy and environmental projects.

Portugal Economic Growth

Growth is expected to lose steam this year amid a broader slowdown in the Eurozone, owing to a weaker expansion in exports. A moderation in domestic demand, reflecting a downturn in the growth of both private consumption and fixed investment, is also expected to weigh on growth. With the European Central Bank set to abandon its ultra-loose monetary policy stance later in the year, tighter global financial conditions pose downside risks to the outlook. FocusEconomics panelists expect the economy to grow 1.7% in 2019, which is down 0.1 percentage points from last month’s forecast, and 1.6% in 2020.

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Portugal Facts

Bond Yield1.59-1.90 %Feb 14
Exchange Rate1.130.65 %Feb 14
Stock Market5,087-0.02 %Feb 14

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