Allianz Trade has revised its economic growth estimates for Portugal upwards. The world leader in Credit Insurance anticipates that Portugal's gross domestic product (GDP) will grow by 1.6% this year and 1.4% in 2025, which represents an upward revision compared to the April forecast, when it anticipated economic growth of 1.3% for 2024 and 1.8% for 2025.
The Portuguese economy has shown signs of resilience despite the various challenges it has faced. The evolution of the tourism sector and private consumption have supported economic growth. However, Allianz Trade points out that there are still risks to be taken into account, particularly due to the uncertainty generated by elections in economies that are particularly important for Portugal, such as France, the United Kingdom and the United States of America (USA) later this year.
Allianz Trade's estimates for inflation in Portugal point to an approximation to the ECB's target of around 2%, and by 2025 it should stand at 1.9%.
Risks of recession in the Eurozone persist
The economic outlook for the Eurozone continues to point to slight growth this year, but the risks of a possible economic recession have not been removed. Allianz Trade estimates that the euro economy will grow by 0.7% in 2024 and 1.4% next year, thus remaining in line with previous estimates. Among the euro economies, German GDP is expected to grow by just 0.1% this year and 0.9% in 2025. According to the world leader in Credit Insurance, Germany, the engine of the euro economy, has low potential growth, being penalized by deteriorating competitiveness and stagnating productivity.
The French economy, Portugal's important economic partner, is expected to grow by 0.9% in 2024 and 1.3% the following year, with the Gallic economy going through a period of uncertainty as a result of political uncertainty, with the country being called to the polls. The Spanish economy is expected to expand by 2.1% this year and 1.7% in 2025, which is also above the average forecast for the single currency area.