Portugal Economic Outlook
October 27, 2020The economy should have recovered somewhat in Q3, although the fallout from the pandemic continued to weigh on activity. Available data shows that industrial production returned to growth in August after declining in July. Moreover, in July–August retail sales shrank at a softer pace than in Q2. However, tourism revenues were still down severely in the same two-month period. Turning to Q4, a surge in cases and implementation of some new restrictions in mid-October bodes ill for activity. In other news, on 12 October the government submitted the draft 2021 budget to parliament. The plan sees a reduction in expenditure to 47.8% of GDP (2020: 49.9%), due to a reduced need for fiscal support as the economy rebounds. The budget aims to strike a balance between supporting the recovery—the government will boost investment and subsidies for lower-income workers—and containing the fiscal deficit.
Portugal Economic GrowthThe economy is seen rebounding next year, as the effects of the pandemic dissipate, providing room for the return of demand through recovering tourism and household consumption. Investment should also recover on decreasing uncertainty. Delays in implementing a vaccine and a possible prolonged health crisis pose downside risks to the outlook. FocusEconomics Consensus Forecast panelists see GDP growing 5.5% in 2021, which is down 0.1 percentage points from previous forecasts. For 2022, the panel sees it climbing 3.4%.
Portugal Economy Data
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Portugal Economic News
June 30, 2021
Industrial output grew 27.1% year-on-year in seasonally-adjusted terms in May (April: +37.3% s.a.
June 29, 2021
Consumer sentiment increased moderately to minus 12.6 in June, after May’s minus 12.8, with the improvement likely curtailed by increasing Covid-19 activity threatening the return of restrictions.
June 1, 2021
Industrial output rose 36.9% year-on-year in seasonally-adjusted terms in April, which was up from March’s 5.7% increase.
May 31, 2021
A second estimate confirmed that GDP fell 3.3% on a seasonally-adjusted quarter-on-quarter basis in the first quarter, contrasting the 0.2% expansion logged in the fourth quarter of last year.
May 28, 2021
Consumer sentiment jumped to minus 12.8 in May, above April’s minus 17.1.