The Portuguese economy is expected to register a growth rate of 1.7 percent in 2016, one tenth of a percentage point less than the previous forecast, according to a report issued Thursday in Brussels.
In its Autumn economic forecasts the European Commission also increased the growth forecast of the Portuguese economy for 2015 by one tenth of a percentage point to 1.7 percent and announced that the budget deficit this year will be 3.0 percent, the maximum value allowed by the Maastricht Treaty.
In the Spring economic forecasts the Commission expected the Portuguese budget deficit for this year to be 3.1 percent, which kept Portugal in the Excessive Deficit Procedure.
“The economic recovery in Portugal continues to consolidate, driven mainly by domestic demand and with less help from external demand,” the document said.
The 2.6 percent growth of (annual) domestic demand was the main factor in GDP growth in 2015 with the Commission saying “strong export growth, of 7.2 percent, is expected, however, to be exceeded by even greater growth of imports (9.5 percent).”
“Although the public deficit should fall to 3 percent in 2015, the structural deficit is expected to increase in 2015 and, assuming no policy changes, also in 2016,” said the European Commission.
The Commission warned that a “prolonged period of political uncertainty may penalise the confidence of entrepreneurs and consumers,” and added that “the latest figures point to a slowdown in economic growth in the third quarter of 2015.” (macauhub/PT)