International organisations forecast Portugal will grow more than the average

In 2023, the Portuguese economy is expected to grow more than double the Euro Area and the EU, in accordance with the Spring economic forecasts published by the European Commission on 15 May.

According to these forecasts, Portuguese GDP is to grow 2.4% this year, while the EU and Euro Area will have more modest growth, 1% and 1.1%, respectively.

By growing more than its European partners, Portugal will complete eight years in a row of convergence, if 2020 is taken as an exception for having been a year where the global economy contracted heavily due to the pandemic.

The Spring forecasts show a growing optimism on the Portuguese economy’s performance after the European Commission anticipated only 0.7% growth of GDP in November 2022 and 1% in January this year.

Shared optimism

This optimism is shared by other international organisations, of which we note the International Monetary Fund (IMF). 

In a report on Portugal published on 9 May, the IMF corrected igs forecast to 2.6% growth in 2023. This happened after the IMF predicting a growth in GDP of 1% in a wider report on the global economy in April, which was already up on the forecast of October 2022: 0.7%.

This optimism around the Portuguese growth in 2023 is based on the analysis of the economy’s good performance 2022 and in the first quarter of 2023. We note that according to the Statistics Office (INE), Portuguese GDP grew 6.7% in 2022, well above the Euro Area’s 3.5%.

This path remained in the first quarter of 2023. With a rate of de 1.6%, Portugal registered the largest growth in the European Union compared to the previous quarter, while the Portuguese economy grew 2.5% when compared to the same quarter last year, the third largest rate in the EU.

Exports and tourism growing

These good economic results are being driven mostly by exports, with a note to tourism,

In March, service exports, including tourism, went up 31%, while imports only went up by14%. The trade balance surplus in services is now the highest ever. 

The growth rate for exports in goods was 19%, whereas the rate of imports of goods went up 9%.