Portugal’s economy to contract between 7.4% and 12.5%, says PwC

  • ECO News
  • 27 May 2020

According to PwC's estimates, Portugal's economy will contract between 7.4%, in the best-case scenario, and 12.5%, in the worst-case scenario.

PwC released this Wednesday the estimates for the Portuguese economy. In the most optimistic scenario, the country’s GDP will contract by 7.4% this year, while in the most pessimistic view, the drop could reach 12.5%. It should be mentioned that IMF projections suggest an economic contraction of 8% this year.

As for the recovery, whose format has been discussed by economists, PwC predicts that it will occur in U or L when the activity can be normalized. The projections take into account the fact that the crisis stems from a “temporary shock to supply and demand resulting from imposing health measures,” and that there has been an “immediate response to the crisis by the government and the ECB.”

Analyzing the Covid-19 pandemic, compared to other outbreaks with the same profile as this coronavirus, the consultant concludes that the scale of economic disruption “is not comparable to the current outbreak. The key differences are in the number of mild or asymptomatic cases and the length of the infection period.”