Minister of Finance, Fernando Medina, with the President of the Eurogroup, Paschal Donohoe, before the start of the meeting, Brussels, 13 February 2023 (Photo: European Union)
The Portuguese Minister of Finance, Fernando Medina, claimed that the risk of recession in the Portuguese economy is "dismissed". The Minister also noted the macroeconomic forecasts disclosed in Brussels that revise upwards the economic growth and lowered the inflation rate forecast.
"Higher growth and lower inflation, risk of recession dismissed", said Fernando Medina in a statement to the press on entering the Eurogroup meeting.
The Minister also noted "the fact that at the moment, all the forecasts indicate positive growth for the Portuguese economy":
"Any additional growth capability we have and are able to achieve in 2023 is based on using the very high productive capability", he claimed.
According to Fernando Medina, Brussels’s forecasts avoid, when it comes to GDP, "a more complex scenario than the one we envisaged a few months ago", noting even further how the inflation rate forecast was revised downwards.
We recall that the European Commission revised upwards the Portuguese economy’s growth forecast to 1% this year, hoping that, after a weaker start to the year, there is an improvement as of the second quarter.
Brussel’s forecasts represent a revision upwards of 0.1 and 0.3 percentage points, respectively, compared to the November report. However, for this year, it is lower than the Government’s forecast, which expects 1.3% growth.
As for the inflation rate for this year, the EU revised it downwards to 5.4%, noting that the peak was in the last quarter of last year.
In the winter forecasts, now disclosed, Brussels indicates an inflation rate of 8.1% in Portugal 8,1% in 2022 and 5.4% in 2023.
The 2022 forecast is 0.1 percentage points higher than the November report, but it is revised 0.4 percentage points lower than that expected for this year.
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Now, let's delve into the concepts and terms mentioned in the provided article featuring the Portuguese Minister of Finance, Fernando Medina, and the President of the Eurogroup, Paschal Donohoe:
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Eurogroup:
- The Eurogroup is an informal body of Eurozone finance ministers. It plays a crucial role in coordinating economic policies and financial matters among the Eurozone countries, fostering closer economic integration.
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Macroeconomic Forecasts:
- Macroeconomic forecasts involve predictions about the overall economic performance of a country or a region. In this context, Brussels provided forecasts that revised upwards the economic growth and lowered the inflation rate forecast for the Portuguese economy.
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Risk of Recession:
- The term "risk of recession" refers to the possibility or likelihood of an economy entering into a period of negative growth. Fernando Medina, the Portuguese Minister of Finance, claimed that the risk of recession in the Portuguese economy is "dismissed," indicating confidence in the country's economic outlook.
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GDP (Gross Domestic Product):
- GDP is a key indicator of economic health, representing the total value of all goods and services produced within a country. The European Commission revised upwards the Portuguese economy’s growth forecast to 1%, with hopes for improvement in the second quarter.
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Inflation Rate:
- Inflation rate measures the percentage change in the general price level of goods and services over a specific period. The article mentions a downward revision of the inflation rate forecast for Portugal to 5.4%, with a peak noted in the last quarter of the previous year.
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Winter Forecasts:
- Winter forecasts refer to the economic predictions and outlook released by relevant authorities during the winter season. In this case, Brussels disclosed its winter forecasts, indicating positive adjustments to economic growth and inflation rate forecasts for Portugal.
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Government's Forecast:
- The article mentions a variance between the European Commission's forecasts and the Portuguese government's expectations. The government anticipates a higher economic growth rate of 1.3%, demonstrating the differing perspectives on the country's economic performance.
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Productive Capability:
- Minister Fernando Medina emphasized that any additional growth capability in 2023 is based on utilizing the high productive capability of the Portuguese economy. Productive capability refers to the capacity to produce goods and services efficiently.
In summary, the article discusses the statements made by the Portuguese Minister of Finance, highlighting positive revisions in economic growth and inflation rate forecasts for Portugal, as well as the Minister's confidence in dismissing the risk of recession based on the country's productive capability.
