Blanchard on the 2.8% growth: “One swallow doesn’t make a Summer”
Olivier Blanchard, former chief-economist in the IMF, acknowledges a recovery in the Portuguese economy. However, in the study made with Pedro Portugal, there are 4 constraints to growth.
“One swallow doesn’t make a Summer”, warns Olivier Blanchard, former IMF chief economist, about the 2.8% GDP growth Portugal had on the first quarter of 2017. In a meeting with journalists because of the Portugal, from here to where? conference, the expert in macroeconomics acknowledged he was surprised with last month’s economic performance.
“We will be careful, since it may not last long”, stated Blanchard. “Things have improved more than we thought one year ago. Why? It is not very clear to me. What is behind this strong exports performance? We are not sure. It is a big question mark“, added the economist.
Blanchard acknowledges Portugal “is having an economic recovery”, but emphasizes that now, “the issue is getting to know which measures are being enforced, and intensifying them”. More so because there are structural constraints to growth, which he, along with the economist Pedro Portugal, identified in an essay they wrote together.
The study concludes that Portugal’s constraints to growth are:
- Strong internal and external imbalances;
- High public and private debt;
- A lot of NPLs;
- Low productivity growth.
