Bank of Por­tu­gal low­ers growth forecast, be­low govt's es­ti­mate

The Pak Banker - - FRONT PAGE -

The Bank of Por­tu­gal ex­pects eco­nomic growth to re­main un­changed at 1.5 per­cent this year, which is lower than the new left-lean­ing gov­ern­ment's bud­geted tar­get of 1.8 per­cent, and be­low the cen­tral bank's pre­vi­ous es­ti­mate.

For next year, the cen­tral bank ex­pects growth to pick up steam and reach 1.7 per­cent, but in 2018 it ex­pects a slow­down to 1.6 per­cent. It said there were var­i­ous down­side risks to the fore­casts, mainly lower growth from for­eign trade flows. In De­cem­ber, the bank put this year's growth at 1.7 per­cent.

It said the re­vi­sion was due to a de­te­ri­o­rat­ing in­ter­na­tional eco­nomic situation and a slow­down of in­vest­ment in Por­tu­gal. Af­ter pres­sure from Brus­sels, the gov­ern­ment last month re­vised its growth outlook lower to 1.8 per­cent from over 2 per­cent and vowed to cut the bud­get deficit to 2.2 per­cent of gross do­mes­tic prod­uct from last year's 4.4 per­cent. How­ever, the Euro­pean Com­mis­sion, rat­ings agen­cies and many econ­o­mists doubt that the targets will be met. The So­cial­ist gov­ern­ment, which rules with the sup­port of the far left Com­mu­nists and Left Bloc in par­lia­ment, has been reversing the harsh aus­ter­ity of re­cent years.

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