The following represents a general Table of Contents outline for the Country Economic Forecast.
The actual report may cover any or all of the topics listed below. Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following:
Domestic demand Private consumption Fixed investment Stockbuilding (% of GDP) Government consumption Exports of goods and services Imports of goods and services Unemployment Consumer prices Current account balance (US$ and % of GDP) Government budget (% of GDP) Short-term interest rates (%) Long-term interest rates (%) Exchange rate (vs. US dollar) Exchange rate (vs. euro) Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts Charts and Tables - covering a full range of economic developments relevant to the time period covered.
These could include such topics as:
Contributions to GDP growth Monthly industrial output Business and consumer confidence Unemployment rate Retail sales Prices and earnings Consumption and investment Government balance and debt GDP and industrial production Monetary policy and bond yields Background Information on the country One or two pages of text covering the main historical political and economic factors that determine the country's current position Key Facts on the country Map of the country Key political facts Long-term economic and social development - changes since 1980 Structure of GDP by output - latest year Long-term sovereign credit ratings and outlook Corruption perceptions index- latest year Structural economic indicators - changes since 1990 Destination of goods' exports -prior years - latest year Composition of goods & services exports - latest year
Portugal posted the strongest growth in the Eurozone in Q2, with GDP rising 1.1% on the quarter.
Monthly data suggest that Q2 growth was boosted by stronger-than-expected exports as well as some rebuilding of inventories.
The timing of Easter may also have had some favourable calendar effects. Notwithstanding this, the economy still fell by 2% year-on-year.
Although we expect exports to continue rising in the coming quarters, we still believe that GDP will shrink in both Q3 and Q4 as the domestic economy remains constrained by higher taxes and high unemployment.
As a result, we forecast that GDP will decline by 2.1% in 2013 as a whole, rather than the 2.8% fall we expected last month.
Next year, GDP is expected to stabilise. Portugal seems likely to ask for further external financial help next year.
We were already sceptical about the government’s ability to cut the budget deficit by €4.7bn in 2014 to meet the target imposed by official creditors, and this task became almost impossible after the constitutional court recently blocked cuts worth €420m.
We have downgraded the forecast for the 2014 fiscal deficit to 5.5% of GDP, well above the target of 4% currently set by the “troika” of lenders.
We believe that the government will try to use the positive growth surprise in Q2 and the lack of public support for austerity to negotiate another relaxation of the budget deficit targets. But eventually, Portugal will probably apply for a precautionary programme next year.