Portugal Economic Forecast

Portugal Economic Outlook

February 27, 2018

According to a preliminary estimate, GDP growth surged to a 17-year high in 2017, marking a significant point in the economy’s ensuing recovery. While a detailed breakdown of the results has yet to be released, a turnaround in domestic demand led by a surge in fixed investment, appears to have been the key driver of the upturn. Moreover, lower unemployment, which fell to a 14-year low, and private credit expansion likely sustained healthy growth in private consumption. Buoyant activity in the tourism sector and the ongoing real estate boom also appear to have been important contributors to the stellar print. A rebound in consumer confidence and strong business sentiment in January indicate that last year’s robust performance carried over into 2018. On 14 February, the government auctioned EUR 1.25 billion worth of 5-year and 10-year bonds, following the release of the strong growth data.

Portugal Economic Growth

The job-rich recovery should continue at a healthy pace thanks to a flourishing tourism sector, strong real estate investment and solid exports. However, private consumption growth is expected to moderate due to muted wage developments, which, along with an anticipated slowdown in exports, will likely see growth in 2018 moderate from 2017’s multi-year high. Risks continue to stem from a high debt burden. FocusEconomics panelists expect the economy to grow 2.2% in 2018, which is up 0.1 percentage points from last month’s forecast, and 1.9% in 2019.

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Portugal Facts

Bond Yield1.61-1.90 %Mar 15
Exchange Rate1.230.65 %Mar 15
Stock Market5,441-0.02 %Mar 15

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Portugal Economic News