GDP growth this year to exceed official forecast of 5.5%

Portugal’s minister of finance, João Leão, is confident that the country’s economic growth this year will exceed the 5.5% initially estimated, with gross domestic product surpassing its level before the Covid-19 pandemic as soon as the first half of the year.

“This evolution of GDP reinforces confidence in the continuation of the rapid recovery of the Portuguese economy during the year of 2022, the Ministry of Finance said in a statement released on Monday in reaction to data from the national statistics institute, Statistics Portugal (INE), adding that the government is now “anticipating that it may exceed the pre-pandemic level already in the 1st half and [that growth may] even surpass the Government’s estimates for this year, of 5.5%.”

According to the latest figures, the economy grew by 4.9% in 2021, 0.1 of a point more than the government’s most recent forecast, issued in October.

The ministry stressed that the 2021 growth was the “highest growth of the last 31 years (since 1990)” and that increases in investment and exports were “determinant” in this.

The INE data also show that in the fourth quarter of 2021, GDP expanded by 1.6%, for year-on-year growth of 5.8%, driven by the positive contribution of net external demand in the form of accelerating exports.

“This was even the second-highest quarter-on-quarter growth rate in the European Union,” the ministry notes, describing it as “a very positive result for Portugal that shows that the national economy is in a phase of strong recovery and that it has resumed the process of convergence with the European Union since the second quarter of 2021.”