The bank of Portugal anticipates slow recovery but healthy – Jornal de Negócios – Portugal

The Bank of Portugal (BdP) sees economic growth in Portugal to accelerate in the coming years for the house of the 1.5%, based on the dynamism of exports, which will represent almost half of annual income, and investment. Private consumption will lose breath, households and companies reduce their debts, also abroad, and the unemployment will go down the bar of some 8.5% (exceeded already in 2004. )

it Is a slow return, but sustained, you anticipate the central bank and the Portuguese, which, however, will not allow the country to converge with the Euro Zone. The forecasts are part of the Economic Bulletin published 14 December, and, for the first time extend until 2019.

According to the Bank of Portugal, the growth of the national economy should accelerate from 1.2% in 2016, to 1.4% in 2017, and 1.5% in 2018 and 2019, with the essential help of exports and investment, which deserves a positive note of economists of the Almirante Reis.

exports will follow the evolution of external demand, which is expected to recover, and will benefit from gains in market share, although on a smaller scale than in the past. This growth is led by exports, which between 2017 and 2019 grow always above 4% every year, will raise its weight in the GDP to 48% of GDP in 2019, a value that compares with 32% at the beginning of the decade.

The investment also is expected to return to growth exceeding 4% in all years between 2017 and 2019, which is primarily explained by the increase in business investment, since both the public sector as the construction will remain under pressure, with no margin for significant advances in the investment.

sustainable Growth

In contrast to investment and exports, private consumption will grow always below 1.5%, reflecting, in part, the effort of families to reduce their debt in a context of high taxes and fiscal consolidation effort on the part of the State – which requires an almost stagnation of public consumption in the coming years.

According to the Bank of Portugal, the dynamic growth in the course will allow the Country to continue to register surpluses in the external, in the home of 1% of GDP a year, which will help to a gradual reduction of the external debt. The results in terms of external accounts are not, in fact, better, due to the high bill with interest and dividends paid abroad, and a reduction in the expected volume of remittances sent to Portugal. Is that the surplus of the balance of trade, whereas goods and services, roughly 1.8% of GDP a year until 2019.

in light of these forecasts, the central bank speaks of a sustained recovery of the national economy: “These traits are consistent with a growth pattern more sustainable, characterized by the continuation of 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 debt in the private sector non-financial”, writes the bank, noting also that “the recovery in activity will be accompanied by a continuation of the gradual improvement of the situation on the labour market”. The unemployment rate would decline to 8.5% in 2019, which, if so it will be the lowest value since 2004.

Success

forecasts known at the end of 2016 away the scenarios more pessimistic for the domestic economy, but did not cease to highlight the fragility of the Portuguese situation. In 2019, the investment levels and income generated will not have still exceeded those recorded before the crisis in 2008. This with debt levels both public and private higher.

This is the reflection of a slower recovery of the economy than in episodes recessive earlier, which is not a unique characteristic of Portugal, but that feels more in a relatively poor economy and delayed, and which is expected to convergence faster for the average income level in the Euro Zone.

And this is one of the possible disappointment with the figures now presented by the Bank of Portugal: between 2017 and 2019, Portugal does not will converge on the performance of the Euro Zone, rising to slightly less than the average of the region with a single currency, highlights the organism, which argues for the urgency of continuing to implement structural reforms, including in the labour market.

“The structural constraints to the growth of the Portuguese economy, in which assume a particular relevance to the high levels of indebtedness of public and private sector, an unfavourable demographic developments and the persistence of inefficiencies in the labour markets and of the product that require the continuation of the process of structural reforms,” reads the report, that also calls for more ambition also in the reduction of the budget deficit and public debt.