Portugal Economic Forecast

Portugal Economic Outlook

February 4, 2020

The economy looks to have grown at a moderate pace in the final quarter of 2019, although likely continued to outstrip the Eurozone average nonetheless. Industrial production rebounded in November–December—driven by an improving manufacturing sector—with turnover expanding for the first time since May 2019. Furthermore, merchandise exports accelerated in October–November, propelled by healthy intra-EU trade, while tourist arrivals continued to increase robustly in the same period. That said, tepid retail sales growth amid a slackening labor market, a reduction in household credit growth, and more downbeat consumer confidence in December all suggested private consumption faltered in the quarter. In other news, the government’s prospective 2020 budget was approved by Parliament on 10 January. It projects a small fiscal surplus of 0.1% for the year, which the majority of our panelists see as mildly optimistic.

Portugal Economic Growth

Growth is expected to moderate this year as fixed investment will lose momentum amid lower construction funding and waning labor market dynamics and weak sentiment will curb private consumption. Tough external trading conditions, weak global activity and persistently high domestic debt levels remain the key downside risks. FocusEconomics analysts project growth of 1.6% in 2020, which is unchanged from last month’s forecast, and 1.5% in 2021.

Portugal Economy Data

2014 2015 2016 2017 2018
Population (million)10.410.410.310.310.3
GDP per capita (EUR)16,64117,35018,06019,02419,837
GDP (EUR bn)173180186196204
Economic Growth (GDP, annual variation in %)0.91.82.03.52.4
Consumption (annual variation in %)2.41.92.62.13.1
Investment (annual variation in %)2.35.92.511.55.8
Exports (G&S, annual variation in %)4.36.24.48.43.8
Imports (G&S, annual variation in %)7.88.15.08.15.8
Industrial Production (annual variation in %)1.42.12.33.90.1
Retail Sales (annual variation in %)0.72.52.74.14.1
Unemployment Rate14.112.411.18.97.0
Fiscal Balance (% of GDP)-7.2-4.4-1.9-3.0-0.4
Public Debt (% of GDP)131131132126122
Money (annual variation in %)0.94.48.98.08.1
Inflation Rate (HICP, annual variation in %, eop)-0.30.30.91.60.6
Inflation Rate (HICP, annual variation in %)-0.20.50.61.61.2
Inflation (PPI, annual variation in %)-1.9-3.3-2.73.32.7
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)-26.810.7-11.915.2-12.2
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)0.10.21.21.4-0.6
Current Account Balance (EUR bn)0.10.42.22.60.8
Trade Balance (EUR billion)-11.0-10.7-11.2-14.6-17.6

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Portugal Facts

Value Change Date
Bond Yield0.45-1.90 %Jan 01
Exchange Rate1.120.65 %Dec 31

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