Banco de Portugal (BP), in the review of the analyzes for 2021, argues that the pace of the Portuguese economy is slower than expected by the Government and, this trajectory will continue until 2023. The differential of the projections for 2021 is 1.5%, because while the BP defends a 3.9% variation, the Government estimates 5.4%.
In the cycle of the second wave of the pandemic, the monetary authority considers that the fall in Gross Domestic Product (GDP) in 2020 will be 8.1% as a result of two opposing factors: i) recovery in the third quarter; and, ii) the result of the containment measures for the second wave. However, it estimates an improvement next year with an increase of 3.9%, 4.5% in 2022 and 2.4% in 2023; admitting conditioning until the end of the first quarter and practical results of an effective medical solution.
For BP, national and international policies “will continue to play a fundamental role in the recovery and resilience of the national economy, and should promote the resumption of investment and the correct allocation of resources”. And, if the confinement extends to the first semester, the value for the growth of the national economy could be only 1.3% in 2021, 3.1% in 2022 and remain in 2023.
In view of the second scenario, a weak and prolonged recovery, the “financing costs of private agents” and the impact on the labour market (10% unemployment in 2021) will be high. However, in the face of a more moderate economic crisis, the projection is higher than that forecast by the Government in 2021: 5.9%, 4.8% in 2022 and 2% in 2023. This stems from a more favourable hypothesis of the pandemic outbreak, with obvious reflexes positive “in the confidence of agents, leading to a recovery in private consumption and investment in the short term higher than that underlying the base scenario”.
Thus, “exports benefit from a more favourable external demand”, and the economy may be close to ex-ante Covid 19 values in early 2022 (one-year time gain compared to the base scenario. However, the BP bulletin states that the expected economic index would be lower than that projected a year ago.
