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Brussels more optimistic: It sees Portugal growing 1.7% this year (and inflation?)
The European Commission now predicts that the Portuguese economy will grow by 1.7% this year and 1.9% next year.
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Economia Comissão Europeia
The European Commission released today its Spring Economic Forecast in a scenario of geopolitical uncertainty related to two wars close to the European Union (EU), after a first quarter slightly above expectations.
In the previous economic forecast by the European Commission, the Winter Interim published in February, the community executive said it expected the Portuguese GDP to grow 1.2% in 2024 and 1.8% in 2025.
Regarding inflation, the European Commission points to a rate of 2.3% this year and 1.9% next year.
The new data comes at a time when Ukraine continues to face a war due to the Russian invasion and the Middle East is witnessing instability caused by the conflict between Israel and the Islamist group Hamas in the Gaza Strip, geopolitical tensions that affect European economic performance and that can put pressure on prices (of raw materials or energy) and markets (financial and commercial).
Precisely because of such geopolitical uncertainties related to "two wars", the European Commissioner for the Economy, Paolo Gentiloni, stressed on Monday that the recent flash estimates on GDP in the euro area in the first quarter "were slightly above expectations", but still in a context of "very moderate growth".
Stressing the "context in which inflation is coming down", Paolo Gentiloni expressed confidence in a "possible increase in private consumption" and a "strong labour market situation".
However, "it is clear that whenever we mention the economic outlook, we must always remember the uncertainty and risk that the geopolitical situation represents [...] and the fact that we have two wars taking place near our borders is, of course, influencing", he added.
Also in statements made on Monday, the President of the Eurogroup, Paschal Donohoe, spoke of an "economy that remains resilient" and a "GDP growth that has avoided a recession".
"This is positive in the context of the rampant inflation we have endured and the proximity to the [Ukrainian] war, but I also know that the goal of everyone, at this point, is to continue to bring inflation down and start a discussion on how to increase growth", stressed Paschal Donohoe.
According to data from the community statistical office, Eurostat, the GDP of the euro area rose by 0.4% and that of the European Union grew by 0.5% in the first quarter of 2024, compared to the same quarter of the previous year.
Read Also: Brussels today releases projections of moderate growth due to uncertainty (Portuguese version)
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