EU upgrades Portugal’s GDP forecast to 5.5% in 2022

Portugal is, along with Ireland, the euro-zone member with the third-highest projected economic growth rate this year, according to the European Commission, which upgraded its forecast for the country’s rate of growth to 5.5% in its Winter 2022 Economic Forecast, released this Thursday.

According to the commission’s interim forecasts, Portugal’s gross domestic product is set to grow by 5.5% this year, or 0.2 of a percentage point faster than previously forecast. The forecast for this year is in line with the official estimate of Portugal’s government, which sees GDP growing by at least 5.5%.

The rate projected for Portugal by the commission – the same as that projected for Ireland, is only surpassed by the 6.0% projected for Malta and 5.6% for Spain.

In the European Union as a whole, Poland also is projected to see growth of 5.5% this year.

At the other end of the spectrum, the countries with the lowest growth projected for this year are Belgium (2.7%), Finland and Netherlands (both with 3.0%).

For the euro-zone and EU economies as a whole, the commission revised its forecast downward slightly to 4.0%, citing the winter slowdown caused by the Omicron variant as the main factor. In its Autumn Forecast, three months ago, it had foreseen GDP growth of 4.3% this year in both the eurozone and EU as a whole.

For the coming years, the EU executive now sees growth in 2023 slowing to 2.7% for the euro area and to 2.8% in the EU.

But it is more optimistic about Portugal, compared to its autumn forecast, with growth seen at 2.6% in 2023, up 0.2 of a point.

According to the commission, the resurgence of coronavirus infections at the start of this year, as well as the associated slump in the market for international travel, is expected to slow economic growth in Portugal to 0.5% in the first quarter. However, it says, “assuming an improvement in pandemic conditions, growth should accelerate in the second quarter when the economy reaches the pre-pandemic level.”