Portugal Economic Forecast

Portugal Economic Outlook

November 21, 2017

According to a recently released flash estimate, the economy grew at a swifter pace on a quarter-on-quarter basis in Q3. Behind the increase were higher private consumption that fueled an upturn in retail sales, and an improved performance in exports. The external sector made a positive contribution to growth in the quarter as exports outpaced imports. Moreover, the unemployment rate decreased to an over-nine year low in September. Signaling a continuation in the buoyant momentum, consumer confidence shot up to a record high in October, and business confidence remained stable. Upbeat economic prospects and anticipations of a credit rating upgrade have pushed up investor demand for Portuguese sovereign debt, markedly reducing the premium to hold the country’s 10-year government bonds over its top-rated German counterparts. Consequently, the government was able to auction off EUR 1.25 billion of the bonds at a record-low yield on 8 November, cutting the country’s borrowing costs to an all-time low.

Portugal Economic Growth

Solid private consumption, robust investment and a resilient external sector supported by a stronger Eurozone should keep the economy on a healthy growth trajectory. An anticipated fall in exports growth is, however, expected to moderate the economy’s rate of growth next year. FocusEconomics Consensus Forecast panelists see the economy growing 2.0% in 2018, which is up 0.1 percentage points from last month’s forecast, and project GDP growth of 1.8% in 2019.

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Portugal Facts

Bond Yield1.86-1.90 %Dec 06
Exchange Rate1.180.65 %Dec 06
Stock Market5,381-0.02 %Dec 06

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