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The Bank of Portugal expects an economic slowdown of up to 1.2% in 2024

The Bank of Portugal expects an economic slowdown of up to 1.2% in 2024

In the December Economic Bulletin, you see the institution led by Mario Centeno The Portuguese economy grows by 2.1% in 2023, forecasting a slowdown in 2024 to 1.2%, and a recovery in growth in the following yearsTo 2.2% in 2025 and 2.0% in 2026.

In October, he indicated a rate of 2.1% this year, 1.5% in 2024, and 2.1% in 2025.

The recovery in activity will be gradual over the next year. You will benefit from External demand acceleratedThe impact of lower inflation on family income and the increase in European funds in investment.

In the economic bulletin, the supervisor refers to inflation “at relatively limited levels,” pointing to 5.3% this year, which will slow to 2.9% in 2024 and reach the European Central Bank’s target of 2%, as of 2025.

In October, the central bank indicated a rate of 5.4% this year, 3.6% in 2024, and 2.1% in 2025.

Mario Centeno highlights the economy’s tendency to converge with the Eurozone economy and debt to decline. The Governor of the Bank of Portugal stressed that “debt reduction is a priority.”

BdP expects a surplus of 1.1% this year

As expected by Banco de Portugal A budget surplus of 1.1% of GDP this yearThat is, higher than the 0.8% that the government expected, and that the debt ratio will decrease to 101.4% according to expectations issued today.

The December economic bulletin notes that “the surplus this year is expected to reach 1.1% of GDP, higher than the 0.8% expected in the state budget for 2024 (OE2024).”

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However, the Mario Centeno-led foundation points out that despite this positive bottom-line effect, “The least favorable macroeconomic scenario puts the expected 2024 balance at 0.1%.”close to the 0.2% expected in OE2024, presented by the executive in October.

The Bank of Portugal (BdP) also expects the public debt ratio to reach 101.4% this year, 96.8% in 2024, 92.3% in 2025, and 87.9% in 2026.

Salaries are at the highest levels ever paid.
“Salaries in Portugal today are also at the highest levels they have ever been paid,” stated Mario Centeno.

The head of the Portuguese Central Bank stressed that, as is happening in Europe and the world’s largest economies, The labor market in Portugal has been flexible.

“Employment in Portugal is at the highest levels recorded in the country”He said that this was despite the inflationary process.

In its economic bulletin, the Bank of Portugal expects the market to continue to present a favorable situation, despite the near stabilization in employment and expects “an increase in real wages.”

The Central Bank expects the unemployment rate to reach 6.5% this year, 7.1% in 2024, and 7.3% in 2025.

Mario Centeno offers what he calls a “required outlook,” in which there is no recession scenario, but rather a slowdown in some key employment-related indicators.

With Lusa