The OECD has revised growth forecasts for the Portuguese economy upwards this year to 2.5%, driven by the PRR and exports, especially tourism, making it the most optimistic of the major national and international economic institutions.
In its update report on the economic outlook for 2023, published this Wednesday, the Organization for Economic Co-operation and Development (OECD) forecasts Portuguese gross domestic product (GDP) growth of 2.5% this year and 1.5% in 2024, while previously pointing to 1% growth this year and 1.2% in 2024.
For this year, the Public Finance Council (CFP) forecasts growth of 1.2%, the Bank of Portugal (BdP) 1.8%, the International Monetary Fund (IMF) 1%, the Ministry of Finance 1.8% and the European Commission 2.4% .
The OECD highlights the role of the recovery and resilience plan (PRR) in public investment growth, but warns that high uncertainty and rising interest rates will continue to weigh on business and housing investment.
According to the report, the expected acceleration in activity among trading partners will support exports, especially of services.
On the other hand, he points out that “despite the dynamic evolution of wages, Consumption growth will moderate as job growth slows, high inflation continues to weigh on purchasing power and rising interest rates increase debt.”
Exports of goods and services should grow by 8% this year
The OECD forecasts for this year that exports of goods and services will grow by 8%, imports by 3.5%, domestic consumption by 0.6% and investment by 3.1%.
In the portrait from early this year, he emphasizes that as energy and food prices remain high and interest rates continue to rise, domestic demand growth has slowed and inflation is eroding purchasing power.
However, PHP spending, fiscal support measures amounting to approximately 3.7% of GDP in 2023 and increased activity among trading partners are supporting activity. export growth”.
The OECD emphasizes that reforms and investments under the RRP have “great potential” to support growth.
“Ensuring the full implementation of the PRR will maximize benefits. Continuing to improve access to quality childcare will allow more women to enter the labor market and reduce disparities in the labor market,” he added.
Source: DN
