"The Portuguese economy will grow by 4.8% in 2021, edging nearer to pre-pandemic levels by the end of the year," reads the October economic bulletin released this Wednesday by the Bank of Portugal.
The Bank of Portugal maintained its economic growth forecast at 4.8% for 2021, similar to what it had done in the June Economic Bulletin. The economy is expected to reach the end of this year operating at 98.7% of the pre-pandemic level.
“The Portuguese economy will grow by 4.8% in 2021, edging nearer to pre-pandemic levels by the end of the year,” reads the October economic bulletin released this Wednesday by the Bank of Portugal, explaining that “the recovery in activity reflects the control of the pandemic through advances in the vaccination process – with positive effects on economic agents’ confidence – and the maintenance of expansionary economic policies.”
The Central bank’s staff economists explain why the forecast is unchanged from June. “On the one hand, the incorporation of the revised National Accounts translated into a stronger recovery in activity in the second half of 2020, with a positive impact on the annual rate of change in 2021,” the Bank of Portugal describes, adding that the “quarter-on-quarter change in GDP in the second quarter of this year was also slightly higher than anticipated in June due to higher growth in private consumption.”
However, in the second half of this year, the Bank of Portugal identifies a “further slowdown in private consumption and the worsening of supply-side disturbances at a global level – with a negative impact on investment and exports of goods,” which translates “into a downward revision of GDP growth.”