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Template Lifestyles Website2019

Portugal Economics

Portugal’s economy is growing healthily, and its capital is now an international destination for companies, investors and tourists. After growing strongly 2,1% in 2018, the Portuguese economy is expected to continue to grow at a firm, albeit softer pace in 2019-2020. Growth will continue to be supported by sustained job creation and moderate wage growth, favourable financing conditions and increased absorption of EU funds. Inflation followed a volatile path and remained below the euro area average in 2018. In 2019, temporary factors, including base effects related to past increases in prices of tourism services, and reductions of some regulated prices will moderate inflation. After that, we expect inflation to recover gradually to levels approaching the Euro area average, as domestic demand continues to benefit from favourable labour market conditions. The improved economic outlook, together with the correction of fiscal and external imbalances and the restructuring of the banking sector led to a return of the country’s sovereign rating to investment grade by the three main rating agencies in 2017 and 2018. This, in turn, has contributed to a decline of the Portuguese sovereign risk premia to levels below those of Italy and closer to Spain’s. The economic growth, the fiscal adjustment, and lower financing costs have kept the public deficit at low levels and close to Government targets since 2016.

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