Portugal at risk of entering a recession in the next 5 years, says CFP’s economist
CFP's economist noted that there is "a lot of divergences" in the GDP's evolution, and said the lack of improvement in productivity between 2000 and 2017 is concerning.
The recovery of the Portuguese economy after the crisis has been insufficient, and it puts the country behind the rate of improvement of other EU countries, says Miguel St. Aubyn, spokesman of the Portuguese Public Finances Council (CFP), according to the Portuguese newspaper Jornal Económico. Despite the fact that there is a low probability of the country entering a recession in the next 12 months, the country is more exposed to that risk on a long-term.
“The risk of Portugal entering a recession in the next year stands now at 15%, but the probability increases to 55% if we look at the next five years”, he confirmed at a debate this Wednesday.
The economist also noted that the Portuguese GDP’s evolution has been “very divergent”, and warned that the lack of improvements in terms of productivity between 2000 and 2017 is a major concern. Whilst there have been positive evolutions tanks to the consolidation of public finances (freezing wages and increasing taxes), there has been less investment and less physical capital, the same newspaper showed.
At the same event, the former socialist minister for public works, António Mendonça, agreed with the economist and anticipated that Portugal might show an “inability to have the dynamics to overcome” the issues arising from the economic slowdown. Paulo Caldas, AIP-CC’s (Portuguese Commercial Chamber/Portuguese Industrial Association) director for economics, financing and innovation, added that “synergic measures and projects focused alongside a strong coordination of efforts” could help exports to boost their importance for the economy, increasing to 70% of GDP in the next decade.
