Bank of Portugal expects Portuguese economy to contract by real rate of 3.7% in 2020

27 March 2020

Portugal is expected to record a drop in its Gross Domestic Product (GDP) of 3.7%, according to the Bank of Portugal, which published is Economic Bulletin for March in Lisbon on Thursday, including projections for the Portuguese economy for the 2020-2022 period.

For this projection the Bank of Portugal assumed the economic impact of the pandemic to be relatively limited, based on the assumption that the measures adopted by the economic authorities are successful in containing damage to the economy.

The bulletin also outlined weak growth in 2021, with a rate of 0.7%, recovering more strongly in 2022, with a growth rate of 3.1%.

The uncertainty and complexity of this projection means that it is not possible to present a more likely scenario for the evolution of the Portuguese economy, and in this context the central bank opted to present two scenarios – a basic one and a more adverse one – with different presumptions about the economic effects of the pandemic both nationally and globally.

In the adverse scenario this year Portugal would see an economic contraction of 5.7%, which would be followed by growth of 1.4% in 2021 and 3.4% in 2022.

The Bank of Portugal said in its Bulletin that the uncertainty surrounding these scenarios is very high “and even more adverse scenarios cannot be discounted.”  (macauhub)