The outlook for the Portuguese economy in 2013 and 2014 continues to be marked by the process of adjustment of the structural macro-economic imbalances, including the short-run impact of fiscal consolidation measures, as well as tight financing conditions.
In 2013, the implementation of the fiscal consolidation measures included in the 2013 State Budget will contribute to a significant drop in disposable income and in domestic demand. The contraction of economic activity is mitigated by relatively favorable exports developments in the context of a virtual stagnation in external demand (similar to that observed in 2012).
For 2014, the economic activity is projected to increase by 1.3 per cent, in a context in which no further fiscal consolidation measures were considered beyond those included in the 2013 State Budget. The balance of risks for the economic activity is on the downside, with particular focus in 2014, and results, in particular, from the fact that only the fiscal measures already adopted or announced and sufficiently detailed were taken on board.
The great challenge that Portugal is faced with is to promote economic development in a new institutional framework. The consistent implementation of reforms and the redefinition of the role of the public sector are key to stimulating investment, innovation and technical progress, without which there is no economic development. The challenge of economic development involves the mobilisation of agents to the need and the benefits of engaging in reforms that provide levels of well-being compatible with the maintenance of institutional consensus and social cohesion.
Full press release
Economic Bulletin - Winter 2012 (Portuguese)
© Banco de Portugal
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