The government must deliver the documents to Brussels before the end of this month for evaluation by the European Commission. GDP will return to its pre-crisis level in 2022.
Finance Minister João Leão pointed out on Thursday that the government expects the economy to grow by 4% this year and 4.9% in 2022, which means that it will grow by about 9% in two years.
Although it is 1.4 percentage points lower than the forecast of the National Budget for 2021 (OE2021), the Minister of Finance still believes that this year’s reduction is “sound”. João Leão argued: “The revision from 5.4% to 4% relative to 2020 is due to the third wave of forcing restrictions in the first quarter.
The Minister of Finance believes that the level of gross domestic product (GDP) will be higher than 2019 by 2022 before the 2022 pandemic.
As for the unemployment rate, the Minister of Finance pointed out that “with the return of the active population”, this year’s unemployment rate is even higher, at 7.3%. João Leão argued: “This year’s unemployment rate will be slightly higher than last year. An increase of 7.3% because the active population will increase as economic activity resumes. In the coming years and years, the unemployment rate is expected to decline.”
He pointed out that in terms of employment, “we expect that this year’s employment will slightly improve, and this year’s employment growth will exceed 1%.”
At the end of March, Finance Minister João Leão estimated in an interview with RTP that the deficit in 2021 should be between 4.5% and 5% of gross domestic product (GDP), higher than the forecasted 4.3%. National Budget for 2021 (OE2021).
He also said that with regard to estimates of economic growth (5.4% in OE2021), European economic growth will deteriorate “more than one percentage point.”
The document will be submitted to parliament later this Thursday, will be debated by representatives on April 29, and then submitted to the European Commission.
The International Monetary Fund (IMF) predicts that the national public account deficit will account for 5% of GDP this year, and public debt will account for 131.4%.
The deficit figure is slightly lower than the Organization for Economic Cooperation and Development (OECD) forecast, which was 6.3% in December, and higher than the Public Finance Council (CFP) forecast, which was a deficit at the end of March. Accounted for 4.1% of GDP.
As for public debt, the OECD is the most pessimistic entity and is expected to reach 139.7% of GDP this year, while the Public Finance Council pointed out that the ratio is 131.5%, while the government’s latest forecast is 130.9%.
The International Monetary Fund also predicts that Portugal’s GDP will grow by 3.9%, which is the same as the Bank of Portugal’s forecast and higher than the CFP’s forecast of 3.3% this year.
The European Commission pointed out that the economic growth in the February forecast was 4.1%, while the Organisation for Economic Cooperation and Development (OECD) forecasted Portugal’s GDP growth of 1.7% in December.