Portuguese government foresees 0.9% recession in 2011

21st March 2011, Comments 0 comments

The Portuguese government foresees the economy contracting by 0.9 percent this year, despite slight growth up to now, in a new stability and growth programme presented to parliament Monday.

The minority socialist government then sees a return to economic growth in 2012, though just 0.3 percent, followed by a 0.7 percent increase in growth in 2013.

The unemployment rate is expected to continue rising to 11.2 percent this year, as the government's austerity measures take their toll, before falling back to 10.8 percent in 2012.

That belt-tightening will not however stop the the national debt, 82.4 percent of GDP in 2010, from rearing up to 87.9 percent this year and 88.1 percent next year, the government predicted.

In the document, to be debated in parliament on Wednesday, the government reaffirms its "determination to pursue a "major and demanding budgetary consolidation" so as to fulfil the objective of pulling back the budget deficit from 4.6 percent this year to 3.0 percent in 2012, in line with European Union rules.

To do so the government of Prime Minister Jose Socrates foresees "additional measures" this year and the coming years.

That warning came after Finance Minister Fernando Teixeira dos Santos said in Brussels Monday that the political crisis in Portugal brought on by harsh austerity measures could push Lisbon into requiring an international bailout.

© 2011 AFP

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