Brussels, Belgium, 20 Jan – The Portuguese economy is this year expected to contract by 1.6 percent this year, double the level estimated by the Portuguese government, and post a budget deficit of 4.6 percent, or 0.7 percentage points higher than government estimates, the European Commission said Monday.
In its updated forecasts for 2009-2010, published Monday in Brussels, Brussels, the Commission projected that Portuguese gross domestic product (GDP) would see negative growth over the next two years, from +0.2 percent in 2008 to -1.6 percent in 2009 and -0.2 percent in 2010.
According to the European Commission, GDP contraction is due to several factors, such as tighter credit conditions, deterioration of consumer and business confidence and a slowdown in foreign demand.
Most European Union member states will also see negative GDO growth in 2009: -2.3 percent for Germany, -2.0 percent for Spain, -2.0 percent for the Netherlands, -1.8 percent in France, -2.0 percent in Italy and -2.8 percent in the United Kingdom, to name just some of the countries.
Overall the European economy is expected to see negative growth of 1.8 percent in 2009, the Commission projected, adding that it expected a slight recovery towards the end of the year leading to positive growth of 0.5 percent in 2010. (macauhub)