Europe

Portuguese economy grows unexpectedly-Portuguese residents

Portugal’s economy surged unexpectedly in the first three months of 2022, with national GDP 2.6% compared to the last three months of 2021 and 11.9% compared to the first quarter of 2021. I grew up. Victory, the real impact of the war in Ukraine, is to be felt sooner or later.

Treasury Minister Fernando Medina released statistics in parliament last week, saying the economy has grown at an “impressive rate” and has recovered to “pre-pandemic levels.”

“This is an incredibly strong message of confidence that workers and businesses are sending us,” the minister said before admitting that Portugal was unaffected by the war.

“There is no government or budget in the world that can eliminate the effects of the energy, food and geopolitical shocks we face on its own, even considering the most powerful countries,” Medina added. rice field.

Growth above the EU average

The good news is that the Portuguese economy has resisted the first effects of the war.

Portugal was the fastest growing EU economy in the first quarter of 2022, of the 11 countries that revealed this data. Only Austria (+ 2.5% and 8.7% year-on-year increase) and Latvia (+ 2.1% and + 5.6%) approached.

According to the National Statistics Bureau (INE), Portugal’s tourism and recovery of consumer spending have played an important role in improving the economy.

Lifting pandemic restrictions

Paula Carvalho, an economist at BPI Bank’s Economic and Financial Research Unit, believes Portugal “benefited from the relaxation of pandemic-related regulations” when many Central European countries were still dealing with high cases in the winter. I am.

By February, Portugal had already abolished the requirement for self-isolation of those who came into contact with people who tested positive for Covid-19 and the recommendation for remote work.

As a result, Portugal has a “higher migration rate” than other countries, which “naturally affected” the country’s economy, Carvalho said. Eco newspaper.

Economists also believe that Portugal’s physical distance from the Ukrainian War also benefited tourism, reaching “very similar to 2019” levels in January and February, she added. rice field.

Abel Mateus, a professor of economics at the university, agrees that the geographical distance from the conflict in Portugal may help explain why Portugal did not feel the effects of the war in the first quarter of 2022. To do. Still, he warns that “Portugal is not an oasis.” “Indirect effects” will eventually be felt inevitably.

“These will be felt from the second and third quarters,” he said. Observer Doll Newspapers cite inflation and rising energy prices as some of the most likely consequences of the war.

The professor predicted that the impact would depend on how the conflict evolved, adding that the success of Portugal’s tourism is “important” to mitigate the negative effects of the war.

BiG Bank economist João Lampreia also helped to forecast the data, recalling that Portugal was the EU country with the worst economic performance in early 2021.The country was probably experiencing the most difficult time of the pandemic, he said. Eco..

€ 17.5 billion savings during a pandemic

Economist Pedro Braz Teixeira, who links to the Portuguese Competitiveness Forum (Fórumparaa Competitivdade), also provided further insights into the reasons behind Portugal’s economic growth.

According to Teixeira, the Portuguese savings during the pandemic allowed them to spend more on holidays and other things they couldn’t do during the blockade.

In fact, the Bank of Portugal has already stated that the “main weapon” against inflation should be these additional savings. Governor Mario Centeno estimates that it has reached about € 17.5 billion more than the country’s Recovery and Resilience Plan (PRR). The so-called European “bazooka”.

Talk to Observer DollTeisheira added that government measures to mitigate rising fuel prices in Portugal may have helped sustain Portugal’s economic recovery.

Portugal’s trade balance, where exports exceeded imports, is also said to have influenced Portugal’s positive results.

“This result was already expected in some way, given the dynamism demonstrated by the improved exports of goods and tourism demand in February and March,” said the Católica-Lisbon Forecasting Lab (NECEP). Said João Borges de Assunção.Said Observer Doll..

Optimistic forecast

Meanwhile, Bank of the Philippine remains optimistic about the 2022 forecast, continuing to believe that Portugal’s economy has grown 4.2% and the first signs of the second quarter of this year are positive.

However, banks are in line with the more optimistic 4.9% growth forecast of the 2022 national budget, as there are few “signs” that the conflict in Ukraine, which is a “significant disruptive factor for economic growth,” will be resolved. I don’t want that. soon.

However, he added that if the dispute does not increase significantly, he may consider the forecast.

To Michael Bruxo
michael.bruxo@algarveresident.com

https://www.portugalresident.com/portuguese-economy-grows-unexpectedly/?utm_source=rss&utm_medium=rss&utm_campaign=portuguese-economy-grows-unexpectedly Portuguese economy grows unexpectedly-Portuguese residents

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