Portugal: Portuguese economic growth falls to 0.6 percent in 2008

9 October 2008

Washington, United States, 9 Oct – The Portuguese economy is this year expected to grow by 0.6 percent and just 0.1 percent in 2009, according to newly lowered projections from the International Monetary Fund (IMF), issued in Washington Wednesday.

After previously lowering its projections for Portugal the IMF announced Wednesday in its World Economic Outlook report for October that Portuguese growth this year would be 0.1 base points lower than previously projected and for 2009 the fall was even greater – from 0.6 percent to 0.1 percent.

The IMF’s specialists expect Euro Zone countries to see growth of 1.3 percent in 2008 and 0.2 percent in 2009, which are also lower figures than those forecast in July.

If the projections become a reality, Portugal would diverge from its EU partners for the seventh consecutive year.

Spain, one of Portugal’s main EU partners, is expected to go into recession next year, with its economy contracting 0.2 percent, following growth of 1.4 percent in 2008, according to the IMF.

In terms of inflation, the IMF expects Portugal to post a rate of 3.2 percent in 2008 and 2.0 percent the following year.

The IMF now expects Portugal’s unemployment rate in 2008 and 2009 to be 7.6 percent and 7.8 percent, respectively.

The IMF is also projecting a rise in Portugal’s foreign deficit, from 9.8 percent of GDP in 2007, to 12 percent in 2008 and 12.7 percent in 2009. (macauhub)