Portugal expects economic growth of at least 6.7% this year, beating the 6.5% forecast driven by domestic demand and tourism, helping the country reduce one of the highest public debts in Europe, the government said. Treasury Secretary in an interview with Reuters.
Fernando Medina hopes Portugal will avoid a fourth-quarter contraction, which “may be more positive than many analysts think” thanks to the €2.4 billion bailout given to families since October to fight inflation.
The economy should also continue to benefit from tourism recovering from the pandemic, with this tourism more widespread than in the past, the finance minister said.
“Even if the (quarter) growth in the fourth quarter is zero, we will have a growth rate of 6.7% in 2022, one of the highest in Europe,” said Medina.
In the third quarter, growth accelerated to 0.4% due to the unexpected increase in private consumption. While solid growth, coupled with a low unemployment rate, “provides a solid foundation to head into 2023”, this expansion is expected to slow to 1.3% in 2023, with private consumption nearing stagnation and exports decelerating as a result of the crisis in the main European economies.
“It’s a significant slowdown… but it’s growth. After a very strong year, we will continue to grow,” he said, adding that it was possible to beat these forecasts again.
Fernando Medina’s main priority as the European Central Bank raises interest rates to fight inflation is to reduce the national debt. Medina plans to lower it by ten percentage points. This measure should reduce Portugal’s debt ratio.
Source: DN
