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Portugal’s central bank trims 2016 growth forecast to 1.5%

Portugal’s central bank on Wednesday lowered its growth forecast for this year due to slowing investment by companies and a worsening global outlook.

The eurozone nation, whose new socialist government is under pressure to ease austerity and also rein in its public finances, is now set to see gross domestic product increase by 1.5 percent, the central bank said.

That’s down from its previously forecast 1.7 percent growth for 2016.

The government still holds onto its forecast of the economy expanding by 1.8 percent this year, while the EU sees 1.6 percent growth and the International Monetary Fund just 1.4 percent.

Portugal’s economy grew by 1.5 percent last year, up from the 0.9 percent it recorded in 2014, the year it exited its 78-billion-euro ($88-billion) bailout from the EU and IMF.

That pick-up in growth was driven by increases in investment and exports, but these are to slow in 2016.

The Portuguese central bank sees investment rising by only 0.7 percent this year, after jumping by 3.7 percent in 2015. Exports are to slow to a 2.2 percent expansion from 5.1 percent in 2015. Private consumption is also to grow more sluggishly, expanding by 1.8 percent against 2.6 percent last year.