Bank of Portugal l has revised upwards the growth forecast for the Portuguese economy for 2019, now expecting the economy to grow 2% instead of the 1.7% it predicted in June, but warns that the upwards revision is due to the revision made by the National Institute of Statistics (INE), which significantly affected the data for 2017 and 2018. The institution continues to predict a slowdown in the economy, in the same dimension as in June.
Portuguese economy is expected to grow 2% this year, three tenths more than the forecast made in June, says the Banco de Portugal in the October issue of the Economic Bulletin published this Thursday. The update of the forecasts, however, does not point to an improvement in the Portuguese economy next year.
With the revision of the national accounts base carried out by INE last month, the GDP figure was revised upwards, with last year’s growth rate being revised from 2.1% to 2.4%. The Bank of Portugal estimates that this base effect will have an impact on the growth rate forecast for this year, which has now adjusted to 2%, a growth rate higher than expected by the Government – which is 1.9%, but this forecast was made before the revision made by the National Institute of Statistics.
“The higher GDP growth projected for 2019 stems mainly from the incorporation of the new series of national accounts recently published by INE. The incorporation of this new information has significant implications on the level of growth and the intra-annual profile of the main macroeconomic aggregates, so that the projection is not directly comparable with that published in June”, explains the central bank.
Despite the revision of the projections, Bank of Portugal continues to anticipate a slowdown in the economy this year, and of the same size as expected in June, with a slowdown of 0.4 percentage points from 2018.