Portugal’s GDP growth forecast for 2022 largest in the EU

Portugal’s economy has seen the most growth in the European Union in a year, according to the European Commission. Brussels projects that the country’s Gross Domestic Product (GDP) will increase by 5.8% in 2022, particularly due to tourism. The European Commissioner for the Economy, Paolo Gentiloni has said “the reopening of tourism to a country mostly based on external rather than internal tourism also played an important role”.

Ireland is the second country after Portugal with the most positive GDP growth at 5.4%. The projections for the European bloc and the eurozone are just 2.7% for 2022. However, Portugal’s growth project is the highest among the EU member states because it did not grow as strongly in 2021 compared to other countries. Portugal’s GDP increased by 4.9% in 2021, below the EU average of 5.4%. The projection also states that the Portuguese economy’s growth in 2023 will be lower, with a growth of 2.7%.

A report by the European Commission has stated that “the growth projects remain favorable, despite struggles related to the prices of commodities, global supply chains, and greater uncertainty in external demand”.

Growth forecast for 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 ↓

— European Commission 🇪🇺 (@EU_Commission) May 16, 2022

The European Commission has also predicted that inflation in Portugal will reach its peak in the second trimester of this year and gradually stabilize. The Harmonised Indices of Consumer Prices (HICP) are projected to increase from 0.9% in 2021 to 4.4% in 2022, before decreasing to 1.9% in 2023.

The unemployment rate is also projected to decrease to 5.7% this year and to 5.5% in 2023. In 2021, the unemployment rate stood at 6.6%. The European Commission’s projection is more favorable than the one released by the Portuguese Ministry of Finance which estimates the unemployment rate will decrease to 6% in 2022 and 5.7% in 2023.

Prime Minister António Costa said on Twitter that the “economic projects published today by the European Commission are very favorable to Portugal, surpassing even the current projects of growth of the government”. 

As projeções económicas hoje publicadas pela @EU_Commission são muito favoráveis a #Portugal, superando mesmo as atuais previsões de crescimento do @govpt.
De acordo com a Comissão, teremos o maior crescimento da #UE em 2022 e retomamos a convergência.

— António Costa (@antoniocostapm) May 16, 2022