GDP: Many uncertainties in the future
Controlling the pandemic this year will be crucial in determining the economic growth of the national economy, which last year reached historic negative results.
The pandemic crisis continues to wreak havoc on the Portuguese economy and as long as the pandemic is not under control, all data will be uncertain. However, the recovery will start this year, according to the forecasts of several institutions. But it will be higher or lower, depending on the control of covid-19.
But let's get to numbers. This year, the Portuguese Gross Domestic Product (GDP) is expected to grow between 2.5% and 4.5%. Estimates are from the Lisbon Higher Institute of Economics and Management (ISEG). According to the summary of the economic situation in January, growth will depend on pandemic control. For the institute's economists, starting in the first quarter of this year, "in a plausible scenario of progressive and sustained improvements in the control of the pandemic", the economy should begin to grow "in a more regular and sustained manner". "It is assumed that the economy's response will initially be relatively quick and robust, but the pace of growth will most likely be marked by greater or lesser control over the evolution of the pandemic," estimates ISEG.
Economists also believe that this second confinement will be negative but will not have as much impact as the first since there is already more experience and knowledge on the part of companies "that can continue to work, to deal with these situations more efficiently and avoid stops and disruptions in the production chain that occurred in the first confinement".
Less optimistic about growth for this year is the Forum for Competitiveness. The entity led by Pedro Ferraz da Costa was forced to make a downward revision of its GDP estimate to between -4% and + 1% «due to a wide and significant set of factors, while underlining the exceptional environment uncertainty of an unprecedented pandemic in the last 100 years.
The revision is justified with «delays in vaccine production and distribution», «downward revision of growth in the euro area» , or «recessionary fiscal policy».