The European Commissioner for the Economy, Paolo Gentiloni, has announced that the reopening of international tourism is contributing to the projection of a 5.8% growth in Portugal‘s Gross Domestic Product (GDP) this year, the highest in the European Union.
At the press conference to present the European Commission’s spring economic forecasts in Brussels, Gentiloni noted that the projections for Portugal are “really good, both for growth and in relation to the debt-to-GDP ratio, which in 2023 should reach 115%”. That would nonetheless be below the pre-pandemic level.
“The last two years have shown that we need to be even more sustainable, more digital, and more people-focused if we want to be more competitive as a tourist destination.” said Luis Araujo, President of Visit Portugal
Growth forecast for 2022 (%):
— European Commission (@EU_Commission) May 16, 2022
🇵🇹 5.8
🇮🇪 5.4
🇲🇹 4.2
🇪🇸 4.0
🇦🇹 3.9
🇸🇮 3.7
🇵🇱 3.7
🇭🇺 3.6
🇬🇷 3.5
🇭🇷 3.4
🇳🇱 3.3
🇫🇷 3.1
🇪🇺 2.7
🇷🇴 2.6
🇩🇰 2.6
🇮🇹 2.4
🇱🇺 2.2
🇸🇪 2.3
🇸🇰 2.3
🇨🇾 2.3
🇧🇬 2.1
🇱🇻 2.0
🇧🇪 2.0
🇨🇿 1.9
🇱🇹 1.7
🇩🇪 1.6
🇫🇮 1.6
🇪🇪 1.0
Spring #ECForecast ↓
The strong forecast for Portugal is due to the fact that Portugal did not grow “so strongly in 2021 compared to other countries”. Portuguese GDP grew 4.9% last year, below the European average of 5.4%. Gentiloni highlighted the role of foreign tourism, after two years of pandemic.
The European Commission revised upwards the economic growth expected for Portugal this year to 5.8%. The increase was of 0.3 percentage points (p.p.), despite external challenges, according to the spring macroeconomic forecast released in mid May. This is the highest figure among the 27 EU member states, followed by Ireland (5.4%), and well above the average for the European bloc and the euro zone, both of which have growth projections of just 2.7% this year.
There is still a lot of uncertainty, but the light at the end of the tunnel is much stronger. As strong as tourism in Portugal.
Luis Araujo, President of Visit Portugal
The Commission expects Portugal’s GDP to grow 5.8% in 2022 with the services sector, particularly foreign tourism, recovering strongly from a low base. The European Commission report notes that growth prospects remain favorable, despite challenges related to commodity prices, global supply chains and increased uncertainty in external demand.
Reflecting the improved economic conditions, the EU executive sees the public debt-to-GDP ratio falling from 127.4% in 2021 to 119.9% of GDP in 2022, and to 115.3% in 2023, when it would be below the pre-pandemic level.
