IMF cuts down the Portuguese GDP growth to 2.3% this year

  • ECO News
  • 9 October 2018

International Monetary Fund's expectations for the Portuguese economy have lowered to an estimated 2.3% GDP growth, while its forecast for 2019 remains unchanged (1.8%).

The International Monetary Fund (IMF) on Tuesday revised down its projection for Portugal’s economic growth this year to 2.3%, and left its forecast for 2019 unchanged at 1.8%, less than the government is projecting.

According to the latest World Economic Outlook released on Tuesday, the IMF shaved one-tenth of a percentage point off its forecast for growth in Portugal’s gross domestic product, from the 2.4% it had been predicting since April.

That is in line with the government’s own forecast, contained in its Stability Programme 2018-2022, unveiled in April.

For next year, though, the IMF continues to be less optimistic than the government, foreseeing GDP growth of 1.8% – that is, foreseeing a slowdown earlier than the government does. In the Stability Programme, the government sees the economy growing by 2.3% in 2019 and 2020 and slowing to 2.2% in 2021 and 2.1% in 2020.

On the other hand, the IMF remains more optimistic than the government on the jobs market, predicting unemployment of 7% this year and 6.7% next.

The government, in turn, projects the jobless rate to be 7.6% this year, falling to 7.2% next, and only below 7% in 2020 (6.8%) before falling further to 6.5% in 2021 and to 6.3% in 2022.

Unlike the executive, the IMF sees the current deficit deteriorating, from a nil balance this year to a deficit of 0.3% of GDP in 2019. The government’s programme has the current balance surplus swelling to 0.7% of GDP this year and then holding until 2020, before narrowing to 0.4% of GDP in 2022.

Source: Lusa