September 18, 2020

CFP more pessimistic about the Portuguese economy

The Public Finance Council (CFP- Conselho de Finanças Públicas) forecasts a 9.3% recession in the Portuguese economy in 2020, a downward revision in view of the 7.5% drop in GDP expected in June, due to a sharper than expected decrease in exports , caused by covid-19.

The budget deficit is expected to reach 7.2%, 0.8 percentage points more than in June and above the 6.3% forecast by the Government. Consequently, public debt is expected to worsen this year to 137.6% against 117.7% in 2019.

In the report “Economic and Budget Outlook 2020-2024”, released yesterday, the CFP is more optimistic about the recovery already in 2021, expecting an economy growth of 4.8%, above the 3% revealed in June, and 2.8% in 2022, remaining below 2% in the following two years. Thus, only in 2024 should the Portuguese economy recover the real level of GDP recorded before the pandemic.

At the labor market level, the CFP points to a 4% employment contraction this year, with the unemployment rate reaching 10%, dropping to 8.8% in 2021 and 7.8% the following year until reaching 6.8% in 2024 .

Artigo de autoria:
Public Finance Counci