Portugal’s central bank said the economy will contract less than previously forecast in 2012 as exports grow faster.
Gross domestic product will fall 3 percent this year after declining 1.6 percent in 2011, the Bank of Portugal said today in its summer economic bulletin. In March, the bank forecast GDP would decrease 3.4 percent in 2012 and also predicted no growth for 2013.
Exports will grow 3.5 percent in 2012 and 5.2 percent in 2013, more than estimated in March.
Prime Minister Pedro Passos Coelho is facing a recession and rising unemployment as he cuts spending and raises taxes to meet the terms of a 78 billion-euro ($96 billion) aid plan from the European Union and the International Monetary Fund. As the country’s borrowing costs surged, Portugal last year followed Greece and Ireland in seeking a bailout and now aims to return to bond markets in 2013.
To contact the reporter on this story: Joao Lima in Lisbon at firstname.lastname@example.org
To contact the editor responsible for this story: Stephen Foxwell at email@example.com