Portugal’s economy should gradually recover in the next two years, supported by a positive though slight variation of domestic demand, the Bank of Portugal indicates in its Winter Bulletin, released on Tuesday in Lisbon.
In the report, Portugal’s central bank indicates GDP growth of 0.8 percent in 2014 (the same as forecast by the government and the tripartite committee monitoring the assistance programme for Portugal), followed by progression of 1.3 percent the following year.
The positive variation now forecast for private consumption (0.3 percent in 2014) is the main change in the Bank of Portugal’s forecasts for 2014, enabling improved forecasts for the economy as a whole.
In its Summer Bulletin the central bank had anticipated a 1.4 percent contraction of private consumption in 2014, a figure which did take into account the impact of eventual austerity measures that might be envisaged in the 2014 state budget.
But even considering the austerity measures (which include more salary cuts for civil servants and reduced public sector pensions), in the bulletin released on Tuesday the Bank of Portugal envisages 0.3 percent consumption growth.
According to the Bank of Portugal, the revised figure is due to a very small reduction of real disposable income, contrary to what occurred in previous years, and to expectations that improved confidence indicators will lead to a slight fall in the saving rate.
Public consumption continues to drop and should contract by 2.3 percent in 2014. Investment should grow by 1 percent in 2014, after an 8.4 percent contraction this year, and be followed by 3.7 percent growth in 2015. (macauhub)