The Portuguese economy is expected to grow more than twice as much as the Euro Zone and the European Union (EU) as a whole in 2023, according to the spring economic forecasts published by the European Commission (EC) on May 15.
According to these forecasts, the Portuguese GDP is expected to grow by 2.4% this year, while the EU as a whole and the Euro Zone are expected to show much more modest growth: 1% and 1.1%, respectively.
By growing more than its European partners, Portugal will complete eight consecutive years of convergence, if we except 2020, when the global economy had a strong downturn, caused by the pandemic.
The spring forecasts show growing optimism with the performance of the Portuguese economy, after the EC had anticipated a GDP growth of only 0.7% in November 2022 and 1% in January this year.
This is, however, an optimism shared by other international organizations, in particular the International Monetary Fund (IMF).
In a report on Portugal, released on May 9, the IMF corrected its growth forecast to 2.6% in 2023. This after, in April, in a comprehensive report on the world economy, the Fund had predicted a GDP growth rate of 1%, which, incidentally, was already an improvement over the projection made in October 2022: 0.7%.
This optimism about Portuguese growth in 2023 is based on the analysis of the good performance of the national economy in 2022 and in the first quarter of 2023. Remember that, according to the National Statistics Institute (INE), the Portuguese GDP registered a 6.7% growth in 2022, well above the 3.5% of the Eurozone.
In the first quarter of 2023, this dynamic continued. With a rate of 1.6%, Portugal recorded the highest growth in the European Union, compared to the previous quarter, while compared to the same quarter last year, the Portuguese economy grew 2.5%, the third highest rate in the EU.
Exports and tourism grow
These good economic results are being driven especially by exports, with tourism activity standing out.
In March, exports of services, which include tourism, grew 31%, while imports only increased 14%. The surplus in the services trade balance is now the highest ever.
The growth rate of exports of goods reached 19%, while the rate of imports of goods grew 9%.