Portugal’s central bank forecasts return to growth in 2014

Portugal should return to growth next year, following more than two years of recession, with the recovery pulled by exports, the Bank of Portugal said on Tuesday.

The country is due to exit next year from a 78-billion-euro ($107 billion) economic bailout by the International Monetary Fund and European Union granted it in 2011 and begin to finance itself on the markets, but despite reforms has yet to plug its deficit and growth has been weak.

Portugal emerged from a two-and-a-half-year recession in the second quarter of 2013, but for the year as a whole the Bank of Portugal expects the economy to contract by 1.5 percent.

Over the period of crisis (2011-2013) the country’s economy contracted by 6 percent, according to the central bank’s calculations.

For 2015, the Bank of Portugal sees growth picking up to 1.3 percent due to increases in exports and a recovery in domestic demand after years in which households have cut back on consumption.

The central bank emphasised the importance of exports to recovery, but data released Tuesday by the national statistics institute INE showed that export growth slowed in October.

Exports rose by 4.6 percent in October to 4.21 billion euros after having grown by 9.9 percent in September, said INE.