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Country Forecast Portugal Updater

  • ID: 2101495
  • August 2015
  • Region: Portugal
  • 16 Pages
  • The Economist Intelligence Unit

Elections are due on October 4th. The centre-right coalition of the Social Democratic Party (PSD) and the Popular Party (CDS-PP) trails the opposition Socialist Party (PS) in opinion polls. The Economist Intelligence Unit expects the PS to win the election, albeit without an absolute majority. We expect the PS to govern either as a parliamentary minority or in coalition with smaller parties. Either of these outcomes would increase the risk of political instability. Nevertheless, the broad parameters of economic policy are likely to be the same regardless of the next government's composition.

Portugal's successful return to the sovereign bond markets at low yields-suppressed in large measure by sovereign bond purchases being made by the European Central Bank-is allowing the country to repay its EUR26.9bn IMF bail-out loan ahead of schedule, starting this year. The risk of further euro zone instability remains considerable and we believe that Greece is likely to leave the euro zone within the next five years. However, Portugal's emerging economic recovery and relative domestic political stability have reduced its vulnerability to contagion from Greece or elsewhere.

After a budget deficit of 4.5% of GDP in 2014, we expect the deficit to narrow to 3% of GDP in 2015 and 1.8% by the end of the forecast period. Deficit reduction in the 2015 budget depends on an acceleration in growth and a continuation of strong revenue performance-conditions that are likely to be met this year. However, risks to the forecast are subsequently skewed towards larger deficits, and adverse constitutional court rulings have hampered fiscal planning.

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Country Forecast Portugal Updater

Country forecast overview : Highlights

Country forecast overview : Key indicators

Country forecast overview : Business environment rankings

Country forecast overview : Portugal's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure

Fact sheet

Outlook for 2015-19: Political stability

Outlook for 2015-19: Election watch

Outlook for 2015-19: International relations

Outlook for 2015-19: Policy trends

Outlook for 2015-19: Fiscal policy

Outlook for 2015-19: Monetary policy

Outlook for 2015-19: Economic growth

Outlook for 2015-19: Inflation

Outlook for 2015-19: Exchange rates

Outlook for 2015-19: External sector

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data sources and definitions
Global data
Domestic data
Abbreviations

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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