The core of economists at the Catholic University today revised up the estimate of growth of the Portuguese economy for the coming year, from the previous 2.2% to 2.3% of the Gross Domestic Product (GDP).
The prediction of the Portuguese Economy Economics Study Center (NECEP) for 2019 is in line with the government's estimate of the Stability Program 2018-2022 presented in April, at 2.3% of GDP. But according to the PAN, the first political party to meet on Tuesday with the Government on the State Budget, the executive now foresees a 2.2% economic growth for 2019.
The upward revision of Catholic for next year is explained with "the continuation of the economic recovery" in 2018 and with the "expansionist" budgetary stance of the Government for 2019, according to the Center of Studies of Conjuntura of the Portuguese Economy (NECEP) of the Catholic in the quarterly sheet of conjuncture.
"According to public statements by members of the Government on the State Budget for 2019, the budgetary stance is expected to be expansionary, which combined with the continued economic recovery this year justifies a slight revision (+0.1 percentage points) of the NECEP forecast for 2019, from 2.2% to 2.3%, "reads the note.
The NECEP also revised upwards the growth estimate of the Gross Domestic Product (GDP) for 2020, from 2% to 2.1% "motivated only by the improvement in the trend growth of the Portuguese economy."
By 2018, Catholic economists maintain the GDP growth estimate at 2.4%, slightly above the government's forecast of a 2.3% advance.
The NECEP estimates that, in the third quarter of 2018, GDP increased by 0.6% yoy and 2.4% yoy compared to the same period of last year.
"High-frequency data suggest that investment may recover more significantly in the third quarter, with private consumption growing similarly to GDP," explains the NECEP.
In turn, exports "are expected to maintain a healthy recovery in year-on-year terms, even if this could mean a hiccup in the chain variation," economists continue.
On the other hand, the medium-term growth of the economy is "conditioned" due to the "high public and private indebtedness" and the unemployment rate that should be between 6% and 7%.
On the budget deficit, economists continue to forecast that it will be close to 0.9% of GDP in 2018, in the absence of additional measures, thus exceeding the government target (0.7% of GDP).
The NECEP speaks of "risks from the financial sector and public enterprises that may require specific measures of capitalization with an appreciable size not only in this year's execution but also in the next one."
"However, the Government has the necessary instruments to meet the deficit targets if it so chooses," the Catholic economists conclude.