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Press Release on Projections for the Portuguese Economy: 2015-2017

  1. The projections for the Portuguese economy in 2015-2017 point to a gradual recovery of economic activity over the projection horizon. After an increase in gross domestic product (GDP) of 0.9 per cent in 2014, an annual growth rate of 1.7 per cent is projected for 2015, followed by an acceleration to 1.9 per cent in 2016 and 2.0 per cent in 2017 (Table 1). Over the projection horizon, the Portuguese economy is expected to grow at a pace similar to the euro area.
  2. The current projections include information available up to mid-March and the technical as-sumptions underlying the recent projection exercise released by the European Central Bank.
  3. The evolution of GDP continues to reflect a reallocation of productive resources from non-tradable to tradable sectors, which is one of the main characteristics of the recent recovery process of the Portuguese economy. The acceleration of economic activity over the projection horizon mainly reflects exports developments, in line with the assumptions regarding the evolution of foreign demand. This evolution contributes to the maintenance of a surplus in the current plus capital account.
  • Domestic demand grows moderately over the projection horizon, reflecting a continued growth in private consumption, consistent with real disposable income developments, and an acceleration of gross fixed capital formation, in particular business investment. The evolution of domestic demand remains influenced by the need for continuing fiscal consolidation, as well as by the high levels of private sector indebtedness. Over 2015-2017 employment is projected to moderately accelerate, while the unemployment rate is projected to gradually decrease.
  • For 2015 the annual average of the harmonized index of consumer prices is projected to remain virtually stable, while increasing around 1 per cent in the following two years, in line with the moderate recovery in the global economy and in Portugal.
  • Risks to GDP growth and inflation are deemed balanced.
  • Lisbon, 25 March 2015