Tourism recovery sees fresh positivity on growth

New economic forecasts from the European Commission saw Portugal’s GDP increase this year by almost a percentage point more than estimated in the 2022 state budget.

The main reason is the welcome back to pre-pandemic levels of tourism.

Explaining the reports, “Despite the war in Ukraine and escalating inflation, European economists believe that Portugal will experience 5.8% growth in 2022whereas in February they estimated 5.5%”.

These “spring forecasts” are released today, giving wind to the wings of the state budget, which is technically still “in debate” (the final vote being scheduled for May 27).

Expresso explains that Brussels’ forecasts are “much higher than the forecast of 4.9% that the government has included in the state budget”. They are also “the highest among the main national and international institutions that monitor the Portuguese economy – the IMF, for example, having set growth forecasts at just 4%.

In other words, it’s ‘good news’, and it means Brussels sees Portugal ‘recovering’ much faster than the eurozone as a whole, where growth forecasts are stuck at 2.7% This year.

As for Portugal’s budgetary planning on the deficit (a deficit of 1.9% this year), the reflection is “aligned”: Brussels has improved its overview in the review published today by 1.5 points percentage – while she sees inflation “reaching 4.4%” this year (so far it has been on the rise), “below the 6.1% level in the euro zone”.

For 2023, the Commission forecasts growth in Portugal of 2.7%, adds Expresso.

natasha.donn@algarveresident.com

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