Private investment reaches the 2019 below pre-crisis levels – Diário de Notícias – Lisbon

the Bank of Portugal sees “growth more sustainable”, but slow. It is necessary that the State and companies take advantage of a lift from the ECB

The private investment will recover, but at a pace that will not be enough to replace what was destroyed in the crisis post-2008, thus putting into question or delaying the necessary strengthening of the economic potential of the country, alert the Bank of Portugal. The help of the public investment must also fall short of what is needed, “reflecting the current need for fiscal consolidation”.

In the economic bulletin that you yesterday presented to the governor Carlos Costa sends two clear messages: the good is that the pattern of growth is improving – more based on investment and export, less on consumption. The bad is that this is not enough, not by far, and even the progress we now anticipate have the days counted – will last until the European Central Bank rate by perpetrated the support policies to the banks and the public debt (by keeping interest rates very low through monetary expansion/issuance of currency).

the expansion of The economy for this year was revised in high-light (from 1.1% to 1.2%), but the 2017 took a cut, falling from 1.6% in June to 1.4% now.

what can also be understood as a compliment to the economic model advocated by the government, the Bank of Portugal states that “the growth pattern of designed – in components with an evolution more dynamic than the GDP are exports and gross fixed capital formation [fixed investment] – it is compatible with a recovery more sustained of the Portuguese economy, in particular in a situation in which it maintains an ability to finance from the outside and protrude further reductions of the levels of debt in the private sector”. Praises the “restoration” of the domestic demand, marked by the “moderation of private consumption” and by such “recovery” of investment, “in particular the corporate component,” after the fall of 2016.

“These traits are consistent with a growth pattern more sustainable, characterized by the reorientation of resources to the sectors most exposed to international competition, and more productive, by maintaining a surplus in the external accounts, and by continuing the process of reduction of private sector indebtedness non-financial.” Also still expects a “gradual improvement of the situation of the labour market”. The unemployment will recede to 8.5% in 2019.

But it is in investment, particularly in the private sector, which the central bank sees the energy of the economy, although short. The pace of the total investment must be “short of the observed recoveries earlier”. And even with an environment of interest artificially low (the effect of the ECB), “in 2019 the level of GFCF business is expected to remain below that seen in 2008″. Thus, “the contribution of the factor capital [for the evolution of GDP per capita] should be approximately null along the horizon of projection, since, despite the recovery of the investment, this should still remain at levels that only allow you to compensate for the depreciation of capital.”

In 2017, the private consumption slows to 1.3% (the government expects 1.5 percent), public consumption stagnates (disappears the effect of the increase of expenditure for PPP road that allowed for a rise in the real 1% in 2016), the investment reverses the negative trend and rise by 4.4%, remaining above 4% until 2019 (and, here, Carlos Costa is even more optimistic than the government, which expects to 3.1%). Finally, exports will accelerate to 4.8% in 2017, while keeping yourself in the house of 4% over the next three years. The government is more conservative, projecting an increase of 4.2% in the coming year.