Posted By Global Banking and Finance Review
Posted on January 15, 2025
By Sergio Goncalves
LISBON (Reuters) - Provisional indicators point to Portugal's economic growth having accelerated in the fourth quarter, giving the government greater confidence that this year's expansion will be stronger than in 2024, the finance minister said on Wednesday.
Joaquim Miranda Sarmento cited the Bank of Portugal's daily composite indicator of activity, as well as preliminary investment and private consumption data.
"The fourth quarter numbers showed a significant economic acceleration. These are still provisional numbers but they indicate a good fourth quarter and bring greater robustness to our forecast of economic growth of 2.1% in 2025 ... despite external uncertainties," he told a parliamentary committee.
He said there is "enormous international uncertainty arising from possible geopolitical shocks, potential trade wars between major economies and a more difficult economic situation in Germany".
The government expects gross domestic product to have expanded 1.8% in 2024.
Miranda Sarmento said the government is confident that 2025 will go very well, if the international context does not change too much.
The economic outlook also reinforces the government's forecast of another budget surplus this year, of 0.3% of GDP, after 0.4% in 2024, the minister said. He added that all international institutions were forecasting a surplus in Portugal, even though the Bank of Portugal expected a 0.1% deficit.
The National Statistics Institute will release its flash estimate of fourth-quarter GDP on Jan. 30. In the third quarter, Portugal's economy grew 0.2% from the second, at the same pace as in the previous three months, and 1.9% year-on-year.
(Reporting by Sergio Goncalves; editing by Andrei Khalip, Kirsten Donovan)
