Bank of Portugal predicts a slow reduction in unemployment this year
The Central Bank predicts a reduction in unemployment this year below the 6.6% that the Government predicted last June.
According to a report published this thursday, Bank Of Portugal’s optimism was moderate with regard to labour market forecasts. The institution continues to predict a reduction in unemployment this year, but at a slower pace, now predicting that the rate will stand at 6.4% in 2019, a tenth above that expected in June, but below the 6.6% that the Government predicted in June.
This lower optimism is essentially due to a downward revision of the employment growth forecast, which has ceased to be 1.3% and now stands at 0.9%, which is more optimistic than the Government’s (April’s) forecast of 0.6% employment growth.
Although the developments are not as optimistic as they were a few months ago, the central bank points out that this reduction in unemployment and, consequently, the reduction in resources available in the labor market, allows us to anticipate that “wages will accelerate”.
“Limitations in labour supply and the dynamics of demand have contributed to increase pressure on wages,” says the Bank of Portugal.