Portuguese GDP grew 4.9% in 2021, according to data released Monday by Statistics Portugal (INE). This is higher than the government expected in October for its 2022 state budget proposal. “In 2021 as a whole, GDP recorded a growth of 4.9% in volume, the highest since 1990, after the historic decrease of 8.4% in 2020, following the markedly adverse effects of the pandemic on economic activity,” INE indicates. The data exceeded both the government’s estimates and those of the central national and international institutions. The measures to support the economy and health adopted in December due to the worsening of the pandemic in the country did not alter the economic growth forecast in 2021, Finance Minister João Leão said on 17 January. This is in line with projections by the Bank of Portugal and the Organisation for Economic Cooperation and Development (OECD), he added. However, last Tuesday, the Prime Minister, António Costa, pointed to a growth estimate of 4.6%.
Amongst the main national and international institutions, the least optimistic was the International Monetary Fund (IMF), which projected 4.4% growth, while the European Commission forecast 4.5% and the Public Finance Council 4.7%. According to INE, the evolution is explained by “an expressive positive contribution” of domestic demand, after “having been significantly negative in 2020”, with a recovery in private consumption and investment. The contribution of net external demand was “much less negative in 2021,” explained the statistics agency, detailing that there were “significant increases” in imports and exports of goods and services. In the fourth quarter of 2021, GDP grew 5.8% year-on-year and 1.6% quarter-on-quarter. In year-on-year terms, the contribution of net external demand was positive due to an acceleration in the volume of exports of goods and services, and a positive contribution of domestic demand was also recorded. “It should also be noted that in the fourth quarter of 2021 there was a significant loss in terms of trade, more intense than in the two preceding quarters, as a result of pronounced growth in the import deflator, namely of energy goods and raw materials,” the INE report states.