Bank of Portugal lowers 2014 economic growth projection to 0.9 pct

9 October 2014

The Bank of Portugal (BoP) lowered its forecast for growth of the Portuguese economy in 2014 from 1.1 percent to 0.9 percent, according to the Autumn Economic Bulletin published Wednesday in Lisbon.

The new forecast is a cut of two basis points on the previous estimate released in June and, according to the document, “these projections have an implied gradual recovery in economic activity during the second half of the year.”

The Portuguese central bank’s new forecast is slightly lower than the figure published Tuesday by the International Monetary Fund in the Autumn World Economic Outlook, which pointed to growth of 1 percent, but is the same as the figure provided by the government in its budget amendment presented in late August .

“The revision of GDP growth by 0.2 percentage points is the result of a slight downward review of public consumption and net exports, which are not offset by the upward reviews of private consumption and investment,” said the BoP.

With these reviews the balance of goods and services is expected to have a surplus of 1.6 percent of GDP, instead of the 2 percent previously estimated and the balance of trade will be 2.2 percent of GDP (not 2.8 percent).

Inflation was also revised downwards and the BoP now points to a 0 percent rate this year, a similar figure to the one projected by the IMF. (macauhub/PT)