Portugal’s economy expected to remain in recession in 2013

9 October 2012

The Portuguese economy is expected to contract by 3 percent this year and 1 percent in 2013, according to projections from the International Monetary Fund (IMF) included in its World Economic Outlook, published Monday in Washington DC.

The IMF projections, which are the same as the latest projections from the Portuguese government, show that Portugal’s recession next year will be exceeded only by the economic recession in Greece (-4 percent) and Spain (-1.3 percent) and will be the same as the economic contraction expected in Cyprus (-1 percent).

The figures mean that Portugal will have been in recession from three consecutive years and that in the last six years – from 2008 to 2013 – growth was seen in just one of them (2010) and stagnation in another (2008).

The IMF figures differ from those of the Portuguese government when it comes to the rate of unemployment as it continues to forecast a rate of 15.5 percent for this year and 16 percent for next year, whilst the Portuguese Finance Minister has said that 16.4 percent of the active population are expected to be unemployed in 2013.

Meanwhile, the August figures from the Organisation for Economic Cooperation and Development (OECD) point to an improvement of the Portuguese economic situation, noting that it is seeing its best performance since October 2011.

According to the OECD Portugal’s advanced indicator showed an improvement of 0.24 percent in August, which is the fifth consecutive monthly rise, and the biggest of those five months.

The OECD advanced indicator makes it possible to forecast the trend for the economy over the following six months, thus suggesting that in 2013 the Portuguese economy will experience a less serious recession.

The latest figures from the Portuguese National Statistics Institute (INE) showed that the country’s gross domestic product (GDP) fell 3.3 percent year on year in the second quarter, as compared to a drop of 2.3 percent year on year in the previous quarter. (macauhub)