“The CIP/ISEG forecast for the whole year remains between 1.5% and 1.8%, with a central estimate of 1.7%, persisting relevant risks on the external front due to geopolitical instability in the Middle East and trade tensions associated with tariff impositions,” notes the Economic Outlook Barometer by the Portuguese Business Confederation (CIP) and the Higher Institute of Economics and Management (ISEG).
It states that the figures for the second quarter “are based on data that allow for the anticipation of positive performance in the retail trade, services sectors, and, to a lesser extent, in industrial production and the construction sector.”
The CIP/ISEG barometer also points out that the evolution of confidence indicators “improved substantially throughout the quarter, reversing the declining trend observed in the first quarter of the year.”
For the second half of the year, it maintains “the perspective of favorable internal demand performance, reinforced by the increase in household disposable income resulting from approved budgetary measures, as well as the maintenance of private and public investment.”
Conversely, the evolution of external net demand is “more uncertain” since it is “subject to relevant risks due to geopolitical instability and trade tensions associated with tariff impositions.”
Given that the forecast growth between 1.5% and 1.8% in 2025 implies a chain evolution in the range of 0.4% to 0.8% in the third and fourth quarters, the CIP’s director-general is cautious, warning of the “high level of uncertainty in the international scenario.”
“We are attentive to the negotiations between the European Union (EU) and the United States. If, in the coming days, it is not possible to reach a reasonably acceptable agreement and a wave of retaliations and counter-retaliations ensues, the assumptions of these forecasts will undoubtedly be compromised,” says Rafael Alves Rocha, quoted in a statement.
Last Sunday, the EU and the United States reached a trade agreement providing for the imposition of 15% customs tariffs on European products.
The US and the EU “reached an agreement,” announced US President Donald Trump at the end of a meeting with the President of the European Commission, Ursula Von der Leyen.
The agreement also includes the EU’s commitment to purchase American energy valued at $750 billion (about €642 billion) — aiming notably to replace Russian gas — the investment of an additional $600 billion (€514 billion), and an increase in military equipment acquisitions.
The US and EU countries exchange about €4.4 billion in goods and services daily.
