PARIS (MNI) – The Portuguese economy is likely to continue
contracting in 2012 after a 1.4% decline in GDP this year, once new
budget cutting measures are adopted and implemented, the Bank of
Portugal said in its Economic Bulletin published Tuesday.
The bank’s official spring forecast actually showed Portuguese GDP
eking out a slim 0.3% gain next year after -1.4% in 2011, but the
bulletin noted that the forecasts included neither additional
deleveraging of the economy nor the impact of significant new measures
that would be needed to continue cutting the public deficit.
“In 2012, the ensemble of permanent new measures needed to reach
the [deficit reduction] objective taken on by the authorities is of a
very substantial dimension,” the bank said. “The adoption of these
measures implies a new, significant contraction of economic activity
similar to what is projected for 2011.”
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