LISBON Dec 14 Portugal's moderate economic
recovery will persist in the next few years and the annual
growth rate is likely to edge up gradually after this year's
slowdown to reach 1.5 percent in 2018-2019, the Bank of Portugal
said on Wednesday.
In its winter economic bulletin, the central bank revised
this year's projected growth slightly higher to 1.2 percent - in
line with the government's forecast - from its previous estimate
of 1.1 percent thanks to better-than-expected export growth.
But it also trimmed the forecast for next year to 1.4
percent from 1.5 percent as it now expects a more moderate
expansion of domestic demand.
Portugal, which suffered from a debt crisis and was forced
to impose painful austerity under an international bailout in
2010-13, emerged from its worst recession in decades in 2014,
and growth last year reached 1.6 percent.
The economy has cooled off somewhat since, forcing the
government to trim its growth expectations. Still, the
centre-left government expects it to expand by 1.5 percent in
The central bank expects strong exports to be the main
driver of growth, combined with a moderation of private
consumption and recovery of investment, adding "these features
are consistent with a more sustained growth pattern" and
expecting further gradual improvements in the labour market.
Citing the temporary nature of euro-area economic stimuli
such as record low interest rates and quantitative easing,
however, the bank also called for deeper structural reforms to
stimulate investment and innovation as well as for further
fiscal consolidation to cut public debt in a sustained fashion.
(Reporting by Andrei Khalip; Editing by Gareth Jones)