During the first quarter, the Gross Domestic Product (GDP) contracted by 0.5% quarter-on-quarter, experiencing a 1.6% year-on-year growth, with most analysts anticipating a recovery in the second quarter.
Economists from the Católica-Lisbon Forecasting Lab (NECEP) are the most optimistic, predicting that the Portuguese economy likely grew by 0.7% quarter-on-quarter and 1.9% year-on-year in the second quarter of this year, “offsetting the previous quarter’s 0.5% contraction.”
In their latest note, NECEP economists also downgraded the annual growth forecast to 1.7%.
The Forum for Competitiveness estimates that this year’s GDP will fall “far short of reaching 2%” due to the successive deterioration of external outlooks and the weak first quarter performance.
The Forum for Competitiveness noted the estimate that in the second quarter, the quarter-on-quarter GDP changed from a 0.5% decline to a recovery between 0.2% and 0.5%, corresponding to a year-on-year change between 1.4% and 1.7%.
In its June economic bulletin, the Bank of Portugal indicated that “for the second quarter, a quarter-on-quarter GDP increase of 0.4% is projected, linked to the recovery of Gross Fixed Capital Formation and exports.”
“In particular, goods exports are expected to benefit from a rebound in automobile manufacturing,” the Bank of Portugal added, noting an “contained evolution in consumption considering the impact of lower IRS rebates and declining consumer confidence.”
The CIP/ISEG barometer, on the other hand, forecasts Portuguese economic growth between 0.2% and 0.4% in the second quarter, “partially reversing the 0.5% drop” recorded in the previous three months, anticipating a year-on-year increase between 1.4% and 1.7%.
“Based on partial information available, the expectation for the 2nd quarter is that the Portuguese economy will grow between 0.2% and 0.4%, partially reversing the decline registered in the 1st quarter,” states the barometer from the Portuguese Business Confederation (CIP) and the Lisbon School of Economics and Management (ISEG).
