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Solid growth of the Portuguese economy
GDP IS CURRENTLY 4.3% ABOVE ITS PRE-PANDEMIC LEVEL (+2.2% IN THE EUROZONE). THE STRENGTH OF TOURISM AND FUNDS FROM THE EU’S RECOVERY AND RESILIENCE MECHANISM ARE ACTING AS GROWTH DRIVERS
After +1.6% quartery in Q1 23 (+2.5% y-o-y), +2.7% y-o-y growth is expected in 2023
Containment of headline inflation to 5.4% in 2023, but with downward resistance in core inflation
▲ unemployment (+17% y-o-y) due to an increase in the labour force (+2.1%) outpacing job creation (+0.7%)
Some of the main risks to growth
HOWEVER, PORTUGAL IS VULNERABLE TO TIGHTENING FINANCIAL CONDITIONS AND INTEREST RATE HIKES DUE TO THE HIGH PROPORTION OF FLOATING RATE LOANS AND HIGH DEBT LEVELS
Very high level of public debt, although with a downward trend due to the correction of the deficit