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New economic optimism in Costa’s speech

There is a new economic optimism underlining the prime minister’s interventions. For António Costa, economic growth this year could be higher than expected (1.3 percent of GDP is the government forecast).

“There are better prospects for the European and global economy. This reinforces the belief that this year we will not only grow as we predicted, but that we can grow more than we anticipated,” said António Costa, who spoke to journalists after a visit to the Dielmar clothing factory, in Alcains, in the Castelo Branco district.

The visit was the prime minister’s first initiative under the “Closer Government” program, which took place on Wednesday and continues on Thursday in the district of Castelo Branco, with more than 40 initiatives at which members of the executive will be present. This Wednesday and Thursday, António Costa will visit companies and public services and meet mayors of the region, with a Council of Ministers scheduled for Thursday where issues related to the interior will be discussed.

António Costa maintained his optimism about the behavior of the Portuguese economy for this year about the resilience of the national business fabric, “which has supported the growth of the economy and the evolution of employment”. The behavior of companies during “difficult years”, marked first by the pandemic and then by the consequences of the war in Ukraine and inflation, gives “confidence” with regard to the future, he stressed.

The prime minister pointed to the Dielmar case (pictured), which went into insolvency proceedings in 2021, after the government supported the company with more than eight million euros. In 2022, the Valérius company decided to invest in that company in Alcains, which is already operating normally. “A group invested, restructured and revived the company,” the government leader stressed. 2022 “was a year of enormous uncertainty, marked by the war”, recalls António Costa, noting that, even in the face of this adverse scenario, “the value of Portuguese exports exceeded 50 percent of GDP” . “Of course most of the part has to do with services and tourism, but a huge part – a growing part – has to do with work in the manufacturing sector.”

Costa’s speech now seems framed by the optimistic outlook put forward by the governor of Banco de Portugal (BdP) a few days ago.

“We can avoid the recession”

Speaking to students at a school in Faro, Mário Centeno stated that “in 2022, the Portuguese economy grew more than the European economy, and what the models indicate today is that it will continue to do so for the foreseeable future”.

Days earlier, in Davos, he had expressed confidence in the possibility that the Eurozone would avoid an economic recession scenario this year. “We can avoid a recession,” said the governor, who stated that “quarter after quarter, the economy has surprised.”

Also in Davos, the director-general of the International Monetary Fund (IMF) ruled out a global recession scenario this year, though she said she does not believe in a “drastic improvement” on the current growth forecast (2.7 percent). Bulgarian Kristalina Georgieva acknowledged that her impression is “slightly better than a few months ago”, but not “entirely optimistic”.

Christine Lagarde, the current president of the ECB (European Central Bank), also acknowledged “some improvement” and admitted that the situation “is not as bad as feared”. He said 2022 was an “extremely rare” year given the unusual growth rates.

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Author: João Pedro Henriques

Source: DN

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