Bank of Portugal Forecasts Deeper Economic Contraction This Year
Gross domestic product will shrink 1.9 percent in 2013 after declining an estimated 3 percent in 2012, the Lisbon-based Bank of Portugal said today in its winter economic bulletin. In November, the bank forecast a contraction of 1.6 percent for 2013. It projects growth of 1.3% in 2014.
“The outlook for the Portuguese economy in 2013 and 2014 continues to be marked by the process of adjustment of the structural macroeconomic imbalances, including the short-run impact of fiscal consolidation measures, as well as tight financing conditions,” the central bank said in a statement.
Prime Minister Pedro Passos Coelho is battling rising joblessness and a deepening recession as he cuts spending and raises taxes to meet the terms of a 78 billion-euro ($104 billion) aid plan from the European Union and the International Monetary Fund. Portugal has already been given more time to narrow its budget shortfall after tax revenue missed forecasts.
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