Real GDP grew by 2.7 percent in 2017 on the strength of investment and exports of goods and services, notably tourism, IMF said in Article IV consultation report May 29, 2018.
Flash statistics for the first quarter of 2018 showed somewhat subdued growth largely on account of temporary factors affecting exports, and possibly also of moderation of demand in some export markets.
- IMF mission team forecasts real GDP growth to reach 2.3 percent this year, decelerating to 1.8 percent in 2019 and gradually towards a rate of about 1.4 percent in the medium term.
- Unemployment has fallen to 7.4 percent in March, below the euro area average, with reductions across all dimensions of labor under-utilization. In some sectors of the economy firms are beginning to find it difficult to fill vacancies, especially for high-skill jobs.
- Growth of real average wages continued in 2017, while the minimum wage coverage rose to 22 percent of all earners (from 20.6 percent in 2016) according to provisional social security data, reflecting in part the growth in low-skill positions.
- Non-performing loans (NPL) has fallen by over EUR 13 billion from its peak in mid-2016, bringing the NPL-to-loans ratio to 13.3 percent at end-2017, down from its 17.9 percent peak. This pace is consistent with meeting or exceeding the banks’ NPL reduction objectives.
- Improving skill and education levels in Portugal should continue to support growth in coming years
IMF warns the weakening of euro-area growth would significantly affect Portugal, an open economy whose exports have successfully increased their presence in foreign markets.
Rising house prices should continue to be monitored, given the importance of mortgages in the banks’ loan books, said IMF.
The Golden visa investment in Portugal is already nearing 4 billion euros, contributing significantly to rising house prices in Portugal, with the number of foreigner property buyers from China, Brazil, South Africa investing an average of 500,000 euros in Portugal.
Source: IMF
