NECEP - Católica Lisbon Forecasting Lab - communicates its forecasts for the Portuguese economy today (view report in Portuguese). All indications are that the level of activity of the Portuguese economy would have been, in the 2nd trimester, the largest since the start of the pandemic and the confinement policies implemented in March 2020.
Therefore, the Portuguese economy must have grown 5% versus the previous month or 15.5% compared to the same month in the previous year, which means the economy would be operating at around 95.5% the level of the 4th quarter in 2019, the last without the pandemic and confinement effects. The rest of this year should be influenced by the combined effects of the intensity of still active restrictions and the recovery of tourism.
Our central GDP growth scenario for 2021 is now 3.5%, a revision of the previous 2.5% forecast which would have placed the Portuguese economy operating at around 95.7% the 2019 levels. However, uncertainty is high, and growth this year may vary between 2% and 5%, depending on the intensity of limitations to economic activity and the dimension of budgetary support for companies and families.
For 2022, we expect 4,5% economic growth, which should allow a return to 2019 levels of activity. Once that level has been reached, growth should slow to around 2%, with the foreseeable return to budgetary measures in 2023 in order to reduce public debt to more sustainable medium and long term levels.