The Bank of Portugal stated that it has raised its economic growth forecast for 2014, expecting growth to be supported by expanding domestic demand and strong exports.
The Bank of Portugal has raised its economic growth forecast for this year from the previous 0.8% to 1.2%, in line with the government's forecast last month. The central bank also slightly raised its growth forecast for 2015 from 1.3% to 1.4%, and expects a growth of 1.7% in 2016.
The Bank of Portugal stated: “The forecasts for 2014 to 2016 indicate a gradual recovery of the Portuguese economy, with the predicted growth rate being similar to that of the Eurozone.”
Last year, the Portuguese economy began to recover from the most severe recession since the 1970s, but the economy still contracted by 1.4% for the entire year of 2013.
The Bank of Portugal stated: “The forecasts assume a balanced risk to economic activity, identifying external risks as skewed to the downside and internal risks as skewed to the upside.”
The central bank also expects exports to grow by 5.3% in 2014, with growth of 5.1% and 5.4% in the following two years, slightly revised down from previous expectations.
Private consumption is expected to grow by 1.3% this year, significantly higher than the previous expectation of 0.3%, with forecasts of 1.1% and 1.2% growth in 2015 and 2016, respectively.
