The European Commission improved Portugal’s economic growth forecasts 1.7% this year Is 1.9% nextrates above the eurozone and EU average, driven by private consumption and investment.
In the spring economic forecasts published this Wednesday, Brussels foresees a growth in the Portuguese Gross Domestic Product (GDP) of 1.7% this year and 1.9% in 2025, an upward revision compared to 1.2% in 2024 and 1.8% in 2025 expected in the February Report.
Brussels thus seems more optimistic for this year than the Portuguese Government, which in the Stability Program included a growth rate of 1.5% this year, while the Bank of Portugal (BdP) foresees a GDP expansion of 2%, according to the International Monetary Fund. (IMF) 1.7% and the Public Finance Council (PFC) and the Organization for Economic Cooperation and Development 1.6%.
It also projects that the budget surplus could remain at 0.4% this year, better than the 0.3% noted by Miranda Sarmento, under unchanged policies. The European Commission aims for a public debt ratio of 95.6%.
In the spring economic projections, published this Wednesday, Brussels predicts a budget surplus in Portugal of 0.4% this year and 0.5% in 2025, when it previously pointed to a surplus of 0.1% this year and 0 % in 2025.
However, the starting point of these forecasts is better, since the community executive previously expected a surplus of 0.8% in 2023 and this was set at 1.2%.
The European Commission maintained its forecast for the inflation rate in Portugal at 2.3% this year and 1.9% in 2025. In the spring economic forecasts, published this Wednesday, the community executive maintains, with respect to the February, the forecast of a reduction in inflation in Portugal. the Harmonized Index of Consumer Prices (HICP) from 5.3% in 2023 to 2.3% in 2024 and 1.9% in 2025, reflecting a substantial slowdown in energy and other raw material prices.
Brussels recalls that, in quarterly terms, the annual inflation rate reached 2.4% in the last quarter of 2023, but rose to 2.5% in the first quarter of 2024, mainly due to base effects in prices of energy products.
However, services inflation moderated at a much slower pace to 5% (year-on-year) in the first quarter of 2024, driven by “strong wage growth” and demand pressures from tourism-related activities. .
According to the Commission, the expected increase in real wages and employment “should maintain some pressure on prices, leading to a much slower adjustment of services inflation.”
In the Stability Program, the Portuguese Government foresees an inflation rate, measured by the HIPC, of 2.5% this year and 2.1% in 2025.
Source: Observadora
