The Competitiveness Forum is less pessimistic about the performance of the Portuguese economy between January and March as the institution revised its first quarter GDP projections upwards, which will have contracted between 3.5% and 5.5% after all. same period last year. This projection compares with the year-on-year fall between 5.5% and 8.5% previously estimated by the entity led by Ferraz da Costa. Now, the maximum contraction now projected consists of the biggest break in the product previously estimated by the Forum.
Regarding the chain evolution (compared to the previous period under consideration) of the economy, the Competitiveness Forum anticipates a contraction between 1% and 3% between January and March. This upward revision is explained by the improvement in the pandemic circumstance and the subsequent lack of definition observed during the past month of March. However, the economic downturn will be inevitable because, “as might be expected, due to the severe confinement enacted, the data for January and February were quite negative, particularly in retail sales, services and tourism”.
Tourism was especially affected not only because it is the sector most directly affected by the measures of strong pandemic containment, but also because the tight confinement decided by the Government prevented tourist trips at Carnival and Easter.
The institution chaired by Ferraz da Costa also believes that the second quarter “should already have some recovery”. And it points to “two reasons” for this prediction: the favorable evolution of the pandemic situation following the confinement adopted in mid-January and the meanwhile initiated process of deflation.
In any case, the Forum warns that it is necessary to take into account an “external framework [que] is ambivalent “. It is true that, on a global level,” in general, there have been clear upward revisions in GDP “, with regard to the Eurozone, such” effects have been much more limited or even non-existent, and there are even cases, like Germany, from revisions in the opposite direction “.
“In fact, the worsening conditions of the pandemic in the European Union, in contrast to what is happening in Portugal, may even dictate new constraints, with clear impacts on our exports and tourism. One cannot also set aside an inversion of Portuguese health data. , which, remember, just two months ago were among the worst in the EU “, can still be read in the report released this Monday by the Forum.
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