Brussels expects more deficit than the Portuguese government for 2019

  • ECO News
  • 8 November 2018

The Autumn Economic Forecasts, released this Thursday, have anticipated the Portuguese deficit shall decrease to 0.6% next year, highly contrasting with the Portuguese governments' estimates of 0.2%.

The European Commission estimates that the Portuguese deficit is to decrease one decimal point between this year and the next, to 0.6% of GDP for 2019, which is above the government’s estimates that point to 0.2%.

In the Autumn Economic Forecasts, published on Thursday in Brussels, the community executive has placed itself in line with the government’s forecasts of the deficit for this year, estimating a figure of 0.7% (when spring forecasts anticipated it to be at 0.9%), but expects that next year deficit will only drop by one decimal point, to 0.6%.

In the proposal for the State Budget for 2019 (OE2019), submitted to Brussels last month, the Portuguese government maintained the budget deficit estimate of 0.2% of GDP to 2019, a target to which it committed to in the Stability Programme 2018-2022 presented in April.

The Commission also forecasts economic growth to ease from 10-year high of 2.4% in 2017 to 2.1% in 2018 before moderating further to 1.9% in 2019, and 1.7% in 2020.

The Autumn Forecast expects a slowdown of the Portuguese economy’s growth rate to 2.2% for this year, and 1.8% for next year, in comparison to the government’s 2.3% forecast for 2018, and 2.2% for 2019.

The economic forecast points out that “the domestic demand remains strong, but the growth of GDP in Portugal should slowdown in 2019 and 2020 compared with the weakening of net exports”.