European Commission sees Portugal’s GDP rising 13.5% in Q2

The Portuguese economy will grow 13.5% year-on-year in the second quarter of this year, according to a forecast from European Commission experts. The forecast is included in the Spring 2021 Economic Forecast published on Wednesday.

Compared to the first quarter, the country’s economy will grow by 3.2%, if the Commission’s forecast is confirmed. GDP benefits in the second quarter not only from the lockdown easing plan, but also from the base effect of the second quarter of 2020, which was the most affected by the pandemic because of the first lockdown.

The European Commission expects that Portuguese GDP will continue to grow over the next few quarters, registering a growth of 4% in the third quarter and 4.9% in the fourth quarter, on a year-on-year basis. On a quarter-on-quarter basis, growth is expected to be 3.9% in the third quarter and 1% in the fourth quarter.

For the year, GDP increases by 3.9% in the European Commission forecast, equal to the estimates of the Bank of Portugal and the International Monetary Fund (IMF) and only one-tenth below the 4% forecast by the government in 2021-2025 Stability Programme.

For European Commissioner Paolo Gentiloni, these are “good numbers for Portugal’s growth,” highlighting in an interview with Lusa that they are above Germany’s figures. “If we accumulate [the GDP rises] from 2021 to 2022, we have a growth of over 8%, in line with the Eurozone average and higher than in Germany,” he said. However, the Commissioner warned that “the problem [for Portugal] will be how to make this [pace of growth] lasting and sustainable.”