Bank of Portugal reduces growth forecast and predicts inflation and high interest rates until 2028

The Portuguese economy is expected to grow less than expected, around 1.8% in real terms this year (previous forecast was 2.3%), already taking on the preliminary impact of the new war in the Middle East, indicates the Bank of Portugal (BdP), in the new quarterly economic bulletin, released this Wednesday, March 25, at the Bank’s headquarters in Lisbon.

Inflation skyrockets this year from around 2% to almost 3%, Selic interest rates (assuming market chances until March 13th) rise from an average of 2.2% to 2.7% between 2025 and 2028, public debt will become much more expensive (average cost of 2.4% this year, 2.6% in 2028).

In the macroeconomic scenario, the effects of war, storms and high uncertainty will penalize the growth of family consumption, investment, exports and even employment, which will grow less than predicted in the December quarterly bulletin.

(updating)