The International Monetary Fund (IMF) improved the growth outlook for the Portuguese economy slightly this year to 6.2% on Tuesday, but cut it to 0.7% for next year, proving more pessimistic than the government.
In its update to its global economic forecast released today, the IMF predicts gross domestic product (GDP) will grow by 6.2% this year, an improvement from the 5.8% estimate released in June. was known, and close to the forecast of 6.5% included by the Portuguese government in the state budget for 2023 (OE2023).
In the document delivered to parliament on Monday, the Portuguese executive says it expects growth to slow to 1.3% next year, but the IMF is more pessimistic, seeing the Portuguese economy grow by 0.7%, less than 1.9% forecast in June.
The IMF also estimates a year-over-year growth of 2.3% in the fourth quarter of 2022 and 1.8% in the fourth quarter of 2023.
The Bretton Woods institution predicts an inflation rate for Portugal of 7.9% this year and 4.7%, compared to the 7.4% and 4% forecast by Portuguese management..
The IMF also predicts that Portugal’s current account balance will be -1.1% of GDP this year and -0.4% of GDP in 2023.
In projections, it still estimates an unemployment rate of 6.1% this year and 6.5% next year.
For this year, the Public Finance Council (CFP) and the Bank of Portugal (BdP) forecast Portuguese GDP growth of 6.7% and the European Commission of 6.5%, while the Organization for Co-operation and Development predicts a growth of 5. .4% estimate.
For next year, the CFP predicts 1.2%, the European Commission 1.9%, the OECD 1.7% and the BdP 2.6%.
IMF improves eurozone growth this year, cuts growth to 0.5%
The International Monetary Fund (IMF) improved the growth outlook for the eurozone economy to 3.1% this year, but cut it to 0.5% next year, predicting a recession in Germany and Italy.
The IMF forecasts eurozone growth to slow from 5.2% in 2021 to 3.1%, still an improvement of 0.5 percentage points (pp) compared to forecasts released in July. as a result of stronger-than-expected growth in the second quarter in most of the bloc’s economies.
For the coming year, however, it is more pessimistic and a growth of the Gross Domestic Product (GDP) is estimated at 0.5% minus 0.7 pp. than previously expected.
The institution notes that the growth slowdown in single-currency countries will be less pronounced in 2022 than in the United States, but is expected to deepen in 2023.
However, he points out that the euro area average “hides the heterogeneity between countries”, citing as an example that in the first half of 2022, Italy and Spain saw a recovery of services related to tourism and industrial production, contributions to the expected growth of 3.2% and 4.3% respectively in 2022.
However, he warns that growth in both countries is expected to slow sharply in 2023, with Spain growing 1.2% and Italy registering a contraction of -0.2%.
For Germany, the IMF forecasts growth of 1.5% this year and a recession of 0.3% in 2023.
The IMF explains that weaker growth in the eurozone reflects the effects of the war in Ukraine, particularly in the economies most exposed to Russian gas cuts, but also the impact of changes in the monetary policy of the European Central Bank ( ECB), with an increase in interest rates.
“Russia’s invasion of Ukraine continues to destabilize the global economy. In addition to the senseless escalation and destruction of lives and livelihoods, it has led to a severe energy crisis in Europe that dramatically increases the cost of living and hampers activity.” , he makes clear.
The IMF notes that gas prices in Europe have more than quadrupled since 2021, with Russia cutting supplies to less than 20% of 2021 levels, raising the prospect of energy shortages next winter and beyond.
He also points out that the conflict has also pushed up food prices in global markets, despite the recent easing after the Black Sea grain deal, which is creating problems for lower-income families worldwide.
The IMF today maintained its global growth outlook for this year at 3.2%, but cut it by 0.2 pp. compared with July, next year to 2.7%.
IMF maintains world growth at 3.2% this year, but cuts to 2.7% in 2023
The IMF maintained its forecast for global GDP growth this year at 3.2%, but cut growth by 0.2 percentage point (pp) to 2.7% in 2023.
The International Monetary Fund (IMF) estimates that more than a third of the global economy will contract this year or next, while the three largest economies – the United States, the European Union and China – will continue to stagnate.
“The worst is yet to come and for many people 2023 will look like a recession,” Pierre-Olivier Gourinchas, the institution’s chief economist, warns in the report.
The IMF warns that the world is entering a volatile period, economically, geopolitically and environmentally, with an impact on global perspectives, highlighting in particular the consequences of the war in Ukraine.
Nevertheless, it maintains the global growth outlook for this year unchanged from estimates released in July, but is adjusting it downwards for next year, which is still significantly higher than what was forecast in April.
“The forecasts are weaker than expected for 143 economies before 2023. The 2023 forecast is the weakest since the 2.5% growth seen during the global downturn of 2001 – excluding that during economic crises.” financially and Covid-19,” he says.
The IMF improved by 0.5 pp. the forecast for this year for the eurozone, to 3.1%, compared to July, but reduced by 0.7 pp. those from 2023 to 0.5%.
The slowdown will also be felt in the United States, where the Bretton Woods organization has revised downwards by 0.7pp. the forecast for this at 1.6%, with a growth of 1% in the coming year.
For China, it expects GDP to grow at 3.2% this year and 4.4% in 2023, down 0.1 pp. respectively 0.2 pp. less than before.
Despite the scenario, the IMF notes that “a decline in global GDP or global GDP per capita – which often happens when there is a recession – is currently not in the baseline forecast.”
It admits, however, that a technical recession (at least two consecutive quarters of real GDP contraction) sometime between 2022-23 in about 43% of the economies with quarterly data forecasts (31 out of 72 economies), which amounts to more than one third of global GDP.
The IMF notes that downside risks to the outlook remain high as “the risk of misalignment of monetary, fiscal or financial policies has risen sharply at a time when the global economy remains historically fragile and financial markets are showing signs of stress.” “.
IMF sees eurozone inflation rising to 8.3% in 2022 and falling to 5.7% in 2023
The International Monetary Fund (IMF) predicts that inflation in the eurozone will reach 8.3% this year and fall to 5.7% next year.
In its economic forecast update released today, the IMF revised its forecast for this year up one percentage point (pp) from July to 8.3%.
For the coming year, he sees the inflation of the countries with one currency fall to 5.7%.
Globally, the institution predicts that inflation will peak at the end of 2022, but will remain elevated for longer than expected.
For example, it estimates an increase in average inflation from 4.7% in 2021 to 8.8% in 2022, falling to 6.5% in 2023 and 4.1% in 2024.
However, he points out that there are several factors that could slow inflation moderation, such as new shocks in energy and food prices, and emphasizes that these will remain particularly sensitive as the war in Ukraine progresses.
Source: DN
