Investment should again grow above private consumption next year, reversing the expected scenario for this year, which broke the trend of recent years.
In the macroeconomic scenario underlying the proposed government budget for 2023 (OE2023) submitted to parliament, the government expects investment to grow by 3.6% and private consumption by 0.7%.
This scenario represents a reversal from what was expected for this year, where private consumption is expected to grow by 5.4%, compared to 2.9% for investment.
“In 2023, growth will be based on increased investment dynamism (3.6%), with stronger investment effectiveness foreseen in the Recovery and Resilience Plan (PRR)”reads in the document, which points out that “Nevertheless, business investment growth will be impacted by the increase in uncertainty, the increase in borrowing costs and the continued impact of constraints in global production and distribution chains on costs and supply.” of materials and equipment”.
The Executive Branch emphasizes that “This activity leverage will partially mitigate the slowdown in private consumption, from 5.4% in 2022 to 0.7% in 2023, in a context of stabilizing the savings rate at levels below the historical average.”
In 2022, the growth rate of private consumption will be higher than that of investment, as opposed to 2021.
Still, the executive is more optimistic than the Bank of Portugal (BdP), which estimates private consumption growth at 5.5% and gross fixed capital formation at 0.8%.
The warning of this evolution was made by the governor of the BdP, Mário Centeno, who recently emphasized that “in the statistics of 2022 it will be the first year, after many years in which private consumption outgrows investment”.
“This is clearly a concern for the future,” said the former finance minister at the end of September at the conference “The Impact of the New World Order on the European Economy” hosted by the ECO.
The head of the banking supervisor pointed out that “investments generate income in the future”.
“Since 2014 we have had a very positive process, almost exclusively positive, of more investment growth in Portugal than private consumption”he emphasized at the time, noting that “the cumulative growth in investment over this period was 27 percentage points (pp) higher than that in consumption” and noted that “there are very few countries in Europe that have these types of indicators”.
Source: DN
