Portugal growth to reach 1.5% in 2015: central bank

Portugal’s export-driven economy can expect to expand by 1.5 percent in 2015, following 0.9 percent growth this year, the Bank of Portugal said Wednesday.

The central bank said it predicted a “gradual pickup in exports” when issuing the forecast, which is in line with that of the government.

The Bank of Portugal’s 0.9 percent estimate for 2014 however is slightly less than the government’s 1.0 percent forecast.

A “gradual recovery” begun in 2013 should carry on into the 2014-16 period with “growth slightly higher than that forecast for the eurozone”, the central bank said in its winter bulletin.

For 2016, the Bank of Portugal forecasts 1.6 percent growth in output, down slightly from its estimate last June of 1.7 percent.

Exports, the main driver of the economy, are expected to rise by 4.2 percent in 2015, after a 2.6 percent increase this year.

Domestic demand however is expected to slow to a 1.1 percent rise from 2.3 percent this year.

The European Commission, which tends to be sceptical of Portugal’s macroeconomic forecasts, matched the Bank of Portugal’s prediction of a 0.9 percent increase in GDP this year, but expects 1.3 percent growth next year.

Its forecasts for the eurozone overall are 0.8 percent and 1.1 percent for 2014 and 1015.

Brussels has included Portugal among eurozone states that may fail to keep their budget deficits within the agreed limit of 3.0 percent of gross domestic product.

While Lisbon is targeting a deficit of 2.7 percent of GDP, Brussels’ economic forecasts issued this fall put it at 3.3 percent.

Finance Minister Maria Luis Albuquerque reaffirmed her goal of getting the budget deficit under the bar next year, saying she was prepared to “adapt” the budget strategy accordingly.