The rating agency talks about a slowing of private consumption, public spending and exports to justify the slowdown of the Portuguese economy's growth.
Fitch Ratings expects that the Portuguese economy will undergo a relatively broad-based slowdown in 2019. The rating agency also noted that the country’s very high debt load will keep it very vulnerable to potential shocks in the eurozone financial markets.
“We at Fitch Solutions retain our view that Portuguese real GDP growth will slow in 2019. We expect the economy to expand by 1.5% y-o-y, down from an estimated 2.1% in 2018 and below the Ministry of Finance’s forecast of 2.2%”, the rating agency’s analysis shows.
Private consumption has been a major contributor to real GDP growth over recent quarters, and it will slow following a weakening of consumer trust, the agency notes.
Additionally, the combination of multiple factors is also weighing down on the growth of the Portuguese economy, namely the slowing eurozone growth, and a tightening of monetary policy and fiscal restraint which are doomed to keep consumer confidence relatively low.
Portuguese public debt is only surpassed by Greece and Italy.