the rate of inflation in portugal – and indeed throughout Europe – will be stronger and also more persistent than anticipated. The European Commission predicted this Thursday that Consumer prices will rise 6.8% in 2022 and also, 3.6% next year. Regarding economic growth, it was revised upwards to 6.5% in 2022 (the highest in all of Europe) but fell to 1.9% in 2023.
The report that includes the so-called Summer Economic Forecasts, published by the European Commission, acknowledges that inflationary pressures will be more intense and long-lasting than indicated in the last quarterly report, published in May. At that time, Brussels pointed to a price increase of around 4.4% in 2022 but that it would be corrected already in 2023 to 1.9%.
In other words, not only did the projection for 2022 increase significantly, but also the the estimate of a percentage increase in prices jumped to nearly double next year.
Still, despite the upward revision, Portugal’s figures are slightly below the eurozone average. THE Average inflation in the eurozone will be 7.6% in 2022 and 4.0% in 2023that is, almost four times the ECB’s target in 2022 and double that same target next year.
“Russian aggression against Ukraine continues to negatively affect the European economy, placing it on a path of lower growth and higher inflation,” says the European Commission in a statement released at the beginning of Commissioner Paolo Gentiloni’s press conference. “Many of those that were seen as negative risks in the Spring Forecasts ended up materializing,” acknowledges Brussels.
In 2022, Portugal will have, as expected, the most expressive economic growth in the European Union, something that Gentiloni justified in May as “a different trajectory of recovery in Portugal”. But new forecasts point to an even faster rise in Gross Domestic Product (GDP) in 2022: goes from 5.8% to 6.5%.
In 2023, the percentage of growth will be somewhat lower than expected -1.9%, compared to 2.7% previously-, but it should be noted that, with an improved forecast for 2022, the starting point for 2023 becomes higher.
At a time when several economists point to the risk of recession, the Commission believes that “the European economy is expected to continue expanding, but at a significantly slower pace with respect to what was foreseen in the Spring Forecasts”. The eurozone economy is expected to grow 2.6% in 2022 and 1.4% in 2023.
Source: Observadora
