… although, at a progressively slower pace
According to the macroeconomic projections of Banco de Portugal referring to the period from 2018-21, the Portuguese economic growth is expected to continue, although, at a progressively slower pace. GDP is expected to slow down gradually, from 2.1% in 2018 to 1.8% in 2019, 1.7% in 2020 and 1.6% in 2021, approaching potential output growth.
These projections are broadly in line with those published for the euro area as a whole by the European Central Bank, reflecting a high degree of synchronisation between Portugal and the euro area.
The slowdown in economic activity reflects mainly a progressively lower contribution of exports (net of import content), as international trade is expected to move more closely to world GDP and the export market share is expected to show only marginal gains. A slight decrease of the contribution of domestic demand (net of import content) is also projected.
The Portuguese economy is expected to follow a sustainable growth profile, while maintaining a net lending position towards the rest of the world, as observed since 2012.
The growth rate of external demand for Portuguese goods and services is the main source of risks in 2019-2021, due to the possibility of a deterioration in the international environment, with negative effects on world trade. At European level, the Bank of Portugal highlights the risk of a sudden adjustment in euro area sovereign debt markets, as well as the possibility of a more adverse impact from Brexit.
To read the Economic Bulletin click here