Portuguese economy expected to contract 0,3% in 2023
The Portuguese economy is expected to contract next year, following the trajectory of the other euro economies.
Experts maintain their estimate of a 6,3% growth in Portugal's gross domestic product (GDP) this year 2022. However, for next year they now anticipate a 0,3% contraction, when in July they believed that the national economy could expand 1,7% in 2023.
As for inflation, the world leader in credit insurance has revised upwards its forecasts. Allianz Trade forecasts that inflation in Portugal will be 7% this year and 4,3% in 2023. Previously, the estimate was for inflation of 5,6% in 2022 and 3% next year.
Escalating energy prices and falling business and household confidence continue to penalize the evolution of economies, which led Allianz Trade* to also revise its estimates for growth in the Eurozone. The economists at COSEC shareholder, in the recent study Lights out! Energy crisis, policy mistakes and uncertainty, estimate the euro economy will advance 3,1% this year and contract 0,8% in 2023. Earlier this summer, the credit insurer forecast GDP in the single currency bloc to advance 2.8% this year and 1,5% next year.
"The Eurozone will enter recession next year and the medium-term economic outlook is not very encouraging. Energy prices are expected to remain high, the limited supply of natural gas, combined with persistent geopolitical uncertainty and policy constraints, increase fears of a prolonged recession in 2024. Germany, which has an economy based on a strongly exporting industry, will be one of the geographies that will face a challenging economic context", says Ludovic Subran, chief economist of Allianz Trade.