*
Growth of 6.7% in 2022 strongest in 35 years
*
Q4 GDP growth slowed to 0.2% from 0.4% in Q3
(Adds economist, data)
By Sergio Goncalves and Andrei Khalip
LISBON, Jan 31 (Reuters) - Portugal's economy grew 6.7%
in 2022, its strongest rate in 35 years, boosted by domestic
demand and booming tourism, but inflation hampered demand in the
last quarter in a foretaste of an expected steep slowdown this
year.
Gross domestic product (GDP) grew by 0.2% in the final
quarter versus the previous three-month period when it expanded
by 0.4%, the National Statistics Institute said on Tuesday,
noting a "slightly negative" contribution of net exports.
The 2022 growth rate was largely in line with the
government's target of 6.5%.
Inflation is close to three-decade highs. "We can already see that family income is being affected by inflation and the rise in interest rates on mortgage loans and exports of goods are already slowing down," said Paulo Rosa, senior economist at Banco Carregosa, who expects tourism to be "the only component truly supporting Portugal's growth" this year. He said: "2023 will be a year of strong deceleration and a recession cannot be ruled out if the United States and Germany go into recession." The government projects expansion to slow to just 1.3% in 2023, with private consumption - which represents two-thirds of GDP - almost stagnating as families struggle with high energy and food prices alongside rising interest rates and slowing exports.
Portugal's GDP grew by 5.5% in 2021 helped by the lifting of COVID-19 restrictions, revitalised private consumption, tourism and exports.
That had a somewhat delayed positive impact in Portugal, allowing it to outgrow most EU countries last year. (Additional reporting by Joao Vicente in Gdansk; editing by Sergio Goncalves and Jason Neely)
