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AICEP
Agência para o Investimento e Comércio Externo de Portugal

CABEÇALHO

The longer “hard” lockdown, weather-related losses in construction and impairments in car output due to chip supply problems have prompted us to cut our Q1 GDP forecast to -2% qoq.

We continue to expect a strong rebound in the summer half propelled by healthy global demand, supportive fiscal and monetary policy and German households’ pent-up demand.

Inflation: Now expecting 2% for 2021! The Jan print of 1% yoy surprised massively to the upside, in part due to one-offs. But the strong rise in core goods prices begs the question whether the Jan readings could herald stronger underlying inflation dynamics.

 

There are still strong arguments for a continuation of structurally low inflation dynamics. However, we see risk that price dynamics could strengthen more strongly through impaired supply conditions. O

 

verall, we now project the inflation rate to average 2.0% in 2021. Towards the end of 2021 the headline rate could spike to as much as 3% before easing to 1 ½% in Q1 2022.

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