Follow Portugal Immigration and Portugal's Economy: The Bank of Portugal has raised its economic forecast for the country this year, as export performance has exceeded expectations. However, the bank also warned that a full return to the market remains the greatest challenge facing Portugal.
In its autumn economic bulletin, the bank stated that it expects Portugal's economy to contract by 1.6% this year, an improvement over the 2% contraction predicted in the summer. Last week, Portugal's international creditors also raised their economic forecasts for the country, now predicting a 1.8% contraction for the Portuguese economy this year.
The bank expects exports to grow by 5.8% this year, while domestic demand is projected to decline by 3%.
The bank indicated that if Portugal wishes to attract bond market investors again, it must remain committed to adjusting its domestic economy.
Portugal's 78 billion euro bailout program is expected to conclude in mid-2014, after which the Portuguese government must rely entirely on the market for financing. The bulletin noted that to achieve this goal, Portugal must continue its efforts to improve the economy over the coming years.
