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Portugal Business Forecast Report Q4 2012

703.81

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Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£703.81

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Market

All Sectors

Report Type

Country Guide

Country

Portugal

Published

24 October 2012

Number of Pages

33

Report Delivery

Download

Delivery Lead Time

Immediate

Publisher

Business Monitor International

File Format

PDF

Cracks are beginning to show in Portugals centre-right coalition government as the government imposes further fiscal austerity measures to meet the Troikas targets. While we do not expect that governmental collapse is imminent, it is important to note that public antipathy for the measures is becoming increasingly fraught. Moreover, we reiterate our caution that a comfortable majority in parliament does not guarantee political stability, in particular as the junior coalition members grow increasingly uncomfortable with the austerity drive.

The countrys aggressive fiscal consolidation drive as part of its EUR78bn IMF/EU bailout package will keep domestic demand under significant pressure in the coming years. The only positive contributor to economic growth will emanate from the net exports component of GDP by expenditure. We also highlight balanced risks to our economic growth forecasts in Portugal. We maintain our forecast that the Portuguese government will miss the Troikas fiscal deficit targets in 2012 and 2013; however, we also expect that the international lenders will ease the official bailout targets, potentially following the countrys fifth IMF review.

Major Forecast Changes

We have modestly revised down our forecast for real GDP growth from -3.3% to -3.4% as we expect third quarter growth to show continued acceleration of the economic downturn. Risks To Outlook Downside Risks To Growth Forecast: The biggest immediate danger for Portugal is a deepening of the sovereign debt crisis, either for its own government or in another eurozone country, which would depress domestic confidence and external demand.

Upside Risks To Economic Outlook: At present, we do not envisage long-term real GDP growth rising much above 1.7% in the latter part of our long-term forecasts to 2021. However, we would upgrade our forecasts upon evidence that the governments structural economic reform package is making headway. Furthermore, in the event that the Troika eases deficit targets, there is scope for a moderate boost to economic growth.

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Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£703.81

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