(MENAFNEditorial)
Core Views
* We expect Portugal's budget deficit to remain elevated in 2015-2016 due to weaker export growth and a populist policy agenda ahead of general elections in 2015 which will limit spending cuts. We furthermore caution that Banco Espirito Santo's ongoing bailout presents a significant risk to Portugal's debt and fiscal metrics from 2015 onwards.
* We expect the next administration in Portugal following general elections scheduled for October 2015 to win on an anti-austerity agenda which is likely to aggravate market confidence in Portugal dimming the country's fiscal outlook.
* Ailing demand from eurozone trade partners and limited competitiveness gains will chip away at the momentum behind Portugal's external rebalancing. We forecast the current account surplus to peak at 0.5% of GDP in 2015-2016 before reversing back into deficit of 0.2% of GDP in 2018.
* While Portugal's economic recovery appears to be more resilient than we expected prompting us to slightly adjust upward our estimate for real GDP growth for 2014 we maintain our subdued growth outlook in the coming years. The country's massive debt burden amounting to nearly 400% of GDP will remain a major impediment to growth underpinning our outlook.
Full Report Details at
- http://www.fastmr.com/prod/924078_portugal_business_forecast_report_q1_2015.aspx?afid=101
Forecast Changes
* We have adjusted upward our estimate for growth for 2014 - to 0.9% from 0.6% previously as the recovery in domestic demand has proven more resilient than we previously expected. nevertheless we maintain our subdued growth outlook for the country in 2015-2016 mainly on account of soft external demand and Portugal's hefty debt burden which will limit the country's growth potential.
Risks To Outlook
Downside Risks To Economic Outlook: The public sector's debt burden - at 158% of GDP as of end-Q214 - poses the main downside risk to Portugal's economic recovery. The government's reliance on low borrowing costs means any significant blowout in credit risk could force the government to temporarily cut spending...
The Portugal Business Forecast Report helps businesses with market assessment strategic planning and decision making to promote growth and profitability in Portugal and is an essential tool for CEOs Chairmen Finance Directors/CFOs Managing Directors Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Portugal's economic political and financial prospects through end-2018 just published by award-winning forecasters Business Monitor International (BMI).
Key Uses
* Forecast the pace and stability of Portugal's economic and industry growth through end-2018.
* Identify and evaluate adverse political and economic trends to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
* Contextualise Portugal's country risks against regional peers using BMI's country comparative Risk Rankings system.
* Evaluate external threats to doing business in Portugal including currency volatility the commodity price boom and protectionist policies.
The Portugal Business Forecast Report by Business Monitor International (BMI) includes four major sections:Economic OutlookPolitical OutlookBusiness EnvironmentandKey Sector Outlook.
Economic Outlook:
How will the Portugal economic policy-making and performance impact on corporate profitability over 2014-2018?
BMI provides our fully independent 5-year forecasts for Portugal through end-2018 for more than 50 economic and key industry indicators. We evaluate growth and also forecast the impact of economic management.
Economic Outlook Contents
The Portugal Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018 set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
Data:
* Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita) population inflation current account balance and the exchange rate.
* BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk and rates the business environment within a global and regional context.
Written Analysis:
* Economic Activity - real GDP growth employment inflation consumption (retail sales and confidence).
* Balance of Payments - trade and investment current and capital account.
* Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
* Exchange Rate Policy - currency controls foreign investment flows exchange rates and foreign exchange reserves.
* Fiscal Policy - macroeconomic strategy and policies government finance and tax reforms.
* Foreign Direct Investment - approvals inflows and climate.
* External Debt - debt profile (short and long-term plus public and private sector exposure).
* Global Assumptions - forecasts for each year to end-2018 covering: major commodities growth in key regions inflation and interest and exchange rates in the United States Japan China and the eurozone.
Key Benefits
* Rely upon BMI's 100% independent forecast scenarios for Portugal and underlying assumptions - we take no advertising and are privately-owned.
* Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Portugal sourced and fully maintained by BMI from an extensive network of private sector government and multilateral contacts.
* Gain key insights into the current and future direction of government economic policy which could significantly affect your company's business prospects from BMI's team of analysts and economists.
Political Outlook:
What are the political risks to doing business in Portugal over the next 5-years?
BMI's Portugal country Risk Rankings evaluate the short- and medium-term threats to political stability.
Political Outlook Contents
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