Lisbon, Portugal, 22 March – The Portuguese government lowered its economic growth forecast for 2011 and now expects negative growth of 0.9 percent of the country’s gross domestic product (GDP) after it outlined growth of 0.2 percent in the state budget for this year, according to the latest review of the Stability and Growth Programme (PEC) for this year.
The updated to the 2011 PEC, which was handed to Portugal’s parliament Monday, includes an upwards review of the rate of inflation from the 2.2 percent included in the State Budget to 2.7 percent, an increase to the contraction in public spending to 6.8 percent, as compared to 8.8 percent in the budget, and a downwards review of consumer spending from 0.5 percent to 1.1 percent.
The Portuguese government is also more pessimistic about investment, and is now pointing to a contraction of 4.2 percent, compared to 2.7 percent previously.
The government also expects exports to increase by 5.6 percent this year, with a slowdown of this growth until 2014, when it is expected to total 4 percent, and imports are expected to decrease by 1.1 percent this year and 0.4 percent in 2012, and return to growth in the following years.
The document delivered to parliament Monday also reduced the net external financing needs of the economy, from 8.4 percent that they are expected to have reached in 2010 (according to government calculations), to 8.3 percent this year, gradually falling to 4.9 percent in 2014.
Finally, the government raised its projection for the unemployment rate and now points to a new record, to be reached this year, of 11.2 percent, whilst in the State Budget it pointed to a rate of 10.8 percent. (macauhub)