Paris, France, 26 May – Portugal will be the only one of 34 member countries of the Organisation for Economic cooperation and Development (OECD) in recession in 2012, with its economy contracting 2.1 percent this year and 1.5 percent in 2012, according to the Economic Bulletin published Wednesday in Paris.
In 2012, the second worst performance by an OECD economy is that of Spain, which is expected to post growth of 1.6 percent.
Contraction of the Portuguese economy over the next few years is explained by reduced family spending, as they are faced with increased taxation, salary cuts and interest rate increases.
The Bank of Portugal had already warned there would be a contraction “without precedent” in the disposable income of Portuguese families.
In times of recession unemployment increases and is expected to reach 12.7 percent in 2012, with the OECD forecasting increased unemployment beyond 2012. (macauhub)