Portugal will revise its GDP goal to almost 2%

  • ECO News
  • 31 March 2017

Portuguese Government will revise its 2017 GDP goal upwards, from 1.5% to close to 2%, thanks to the end of last year. Centeno, the Finance minister, disclosed that solving NPL will cost 5 billion.

At Bloomberg headquarters in London, the Portuguese Finance minister gave the good news: the Government will revise upwards the goal for the economic growth in 2017. The 2017 State Budget estimated a 1.5% increase in GDP, but the last quarter of 2016 made it possible to revise the goal to almost 2%, announced Mário Centeno.

The carry-over effect of growth in the last two months of 2016 will benefit the first months of 2017. That is the expectation disclosed by Centeno, saying he has some indications that the economic activity will continue accelerating in the first quarter of 2017: according to the minister, quoted by Bloomberg, the year on year growth will be “clearly” above 2%.

"We are in a good place to leave the EDP [Excessive Deficit Procedure] and this will be an improvement for Portugal and its credibility.”

Mário Centeno

Finance minister

Centeno stated the current projections the Government has for 2017 will be revised and will “certainly be higher than 1.5%”. During the interview, the minister painted a portrait of the Portuguese economic situation: “Portugal is generating budgetary surplus, of around 2%”, he stated, adding the country is close to “generating a surplus of almost 3%”.

“We are in a good place to leave the EDP [Excessive Deficit Procedure] and this will be an improvement for Portugal and its credibility”, stated Centeno, sending a message to markets, which have been putting more pressure on the Portuguese debt interests in comparison to other European countries; the Portuguese ten-year debt interest rate is higher than 4%.

Mário Centeno also stated the Government aims to find a systemic solution for non-performing loan (NPLs), reinforcing the idea that banks are now in a “better position to react to a possible solution” on the matter. The Finance minister mentioned that NPLs are receding. “We think that a solution that brings to the system something close to five billion euros will be able to tackle over time the big problems we still have”, the minister stated.