Centeno expects a better reaction from the economy to an eventual third wave

The governor of Banco de Portugal (BdP) Mário Centeno said this Monday, December 14, that he expects the behavior of the Portuguese economy in the face of a possible third wave of the pandemic, after Christmas, to be better than that seen in the previous ones.

"It is expected that, if a third wave happens, all this learning, and in a context where there is already vaccination, a much more contained effect on the economy can be expected," said Mário Centeno to journalists, at the press conference to present the Bulletin Economic.

BdP maintained its forecasts for the Portuguese economy in 2020, anticipating a drop in Gross Domestic Product (GDP) of 8,1%, according to the Economic Bulletin released today, and for 2021 it expects economic growth of 3,9%.

"We do not release quarterly projections, but we have a gradual recovery clearly more from the second quarter, of the economy, in 2021, and what is underlying here is precisely some maintenance of containment measures in the first quarter of 2021 and after, then, a resumption of economic activity with more intensity starting and including the second quarter of 2021, added the governor.

During the presentation of the Economic Bulletin, Mário Centeno said that Banco de Portugal expects a fall in GDP of 1,8%, in a chain, in the fourth quarter of this year, something that will affect the start of next year.

Mário Centeno thus warned that «the knock-on effect for 2021 is not entirely favorable at the moment», when compared with previous forecasts, in particular with those of October.

"We had the same number for the year [2020, which is -8,1%], but with a very different quarterly composition, with less growth in the third quarter and more growth in the fourth quarter," said the former finance minister. .

Thus, and even in view of the expected growth for 2022 (4,5%), "the growth rate for 2021 is very affected by the bad starting point originated in the fourth quarter of 2020", said Mário Centeno, considering that "it is a little misleading for the dynamics that, quarter after quarter, will materialize in Portugal».