The Bank of Portugal (BdP) announced on Tuesday that the Portuguese economy would fall by 8.1 percent in 2020, reflecting a year-on-year decline of 9.4% in the first half and a recovery in the second half of this year, which translates into a year-on-year change of -6.8 percent.
This projection revises the June forecast upwards by 1.4 percentage points, reflecting a smaller impact of the confinement in the Portuguese economy and a better-than-expected reaction by companies and households, according to the Portuguese Central Bank’s report.
The BdP’s new forecast is in line with the European Central Bank (ECB) forecast for the euro area as a whole. “The behaviour of the Portuguese economy has followed the evolution of the euro area GDP which, according to the projections of the European Central Bank, will decrease by 8.0 percent in 2020, a reduction also lower than previously projected,” noted the Bank of Portugal.
Also revised was the projection for the harmonised index of consumer prices, which rose from 0.1 to 0 percent in the report released this Tuesday.
The Bank of Portugal also estimates that exports will fall by 19.5 percent this year and imports will fall by 12.4 percent, 5.8 percentage points and 10 percentage points less than projected in June.