Portugal’s GDP in 2013 expected to contract 2 pct, or two times initially projections

21 February 2013

The Portuguese economy is this year expected to contract by 2 percent rather than 1 percent as outlined in the State Budget for 2013, Portugal’s Finance Minister Vítor Gaspar said in Lisbon.

During an audience with the parliamentary Finance commission, Gaspar noted that the reviewed projection for GDP was due to a drop in both internal and external demand.

He also said that the European Commission may propose to the Economic and Financial Affairs Council (Ecofin) that the time given to Portugal to correct its excessive budget deficit be extended by a year.

The Finance Minister said that this year extraordinary saving measures would be put in place worth an estimated 0.5 percent of GDP and recognised that the State’s reforms would have to be implemented more gradually and for a longer period, until 2015.

In 2012 Portugal’s GDP posted a contraction of 3.2 percent, which was higher than the 3.0 percent drop forecast by the government and the 3.1 percent contraction expected by the Organisation for Economic Cooperation and Development (OECD). (macauhub)