The Bank of Portugal has made an upward revision of the 2017 growth for Portugal, pointing to 2.5%. The unemployment rate should return to 7% in 2019.
In an upward revision of its forecasts, the Bank of Portugal points to an increase of 2.5% of GDP in 2017. The unemployment rate should also have a positive behavior, returning to 7% in 2019. These data can be found in the June 2017 Economic Bulletin.
If the Bank of Portugal’s projections are confirmed, the Portuguese economy will re-start its conversion process towards the Euro Area, which had been interrupted in the end of the year 2000. The organization headed by Carlos Costa revised upwards these growth forecasts for the entire period of projections.
The upwards revision for 2017 made by the central bank reflects mainly the strong results from the first quarter of this year. In the first three months of 2017, Portugal grew above the Euro Area, aided by the strong contribution of investment and transports, as well as exports. External demand was also revised upwards in five decimals this years, boosting exports.
The Bank of Portugal also highlights Portugal’s growth profile is healthy: “it is consistent with maintaining fundamental macroeconomic balances, with a sustained recovery of the Portuguese economy and with the restart of the real convergence process towards the Euro Area”, the Bulletin explains.
"The projected growth profile for Portugal is consistent with maintaining fundamental macroeconomic balances, with a sustained recovery of the Portuguese economy and with the restart of the real convergence process towards the Euro Area.”
The performance of GDP between January and March was a pleasant surprise which has been causing projections to be revised upwards. The last official forecasts made by the Government align with those of the Stability Programme, presented in April 2017; the Executive has already stated growth should be around 2%.
Even so, there are discrepancies in the growth tendency forecasts: the Bank of Portugal continues to predict a deceleration of economic growth, while the Portuguese Government projects a GDP increase.
In addition, the June Economic Bulletin highlights employment as one of the main contribution for the increase in GDP, and that it should continue progressing positively. Therefore, unemployment rate should decrease to 9.4%, until it reaches 7% in 2019.