Exports that include services such as booming tourism are expected to grow by 4.3% in 2023, higher than the 3.7% forecast in November. However, private consumption, which represents two-thirds of GDP, is expected to grow by just 0.6% this year, compared to around 6% in 2022. The government estimates the unemployment rate at 6.7% at end-2023, declining gradually to 5.8% in 2027. (Reporting by Sergio Goncalves; editing by Andrei Khalip and John Stonestreet)
Messaging: sergio.goncalves.reuters.com@reuters.net)) (Adds exports, private consumption)
By Sergio Goncalves
LISBON, April 17 (Reuters) - Portugal's government on
Monday raised its 2023 economic growth forecast to 1.8% from
1.3% predicted in November, still a sharp slowdown compared to
last year's 6.7% amid stubbornly high inflation, Finance
Minister Fernando Medina said.
The government also raised this year's inflation projection
to 5.1% from 4.0%, but Medina said the pace of price increases
should continue to slow down "gradually and consistently" from
last year's peak of 10.1% in October.
EU-harmonized inflation would then slow to 2.9% in 2024 and
hover around 2% over the next three years.
The budget deficit should end this year at 0.4% of GDP, the
same as in 2022, he told a news conference, presenting
Portugal's Stability Programme for 2023-27, which must be
submitted to the European Commission.
The country should reach a balanced budget in 2026 and have
a surplus of 0.1% of GDP in the following year, Medina said,
predicting that public debt will decline to 107.5% of GDP this
year and then gradually to 92% in 2027.
In each of the next two years, the government expects the
economy to expand by 2%, Medina said.
"We are already growing above pre-pandemic levels and more
than the euro zone average," Medina said. "Summing up, we'll
have more exports (than expected earlier), more GDP, and the
same budget deficit, with the debt coming down."
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