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Impact on Portugal's economic development
Portugal’s economy continued growing in the final quarter of 2022, despite challenging global conditions. According to the flash estimate, GDP increased by 0.2% (q-o-q) in 2022-Q4, after growing by 0.1% and 0.4% in the previous two quarters. On an annual basis, growth in 2022 is estimated at 6.7%, up from 5.5% in 2021. Private consumption and net exports contributed significantly to the expansion, benefiting from a strong rebound in tourism after the lifting of COVID-19 restrictions. On the production side, industrial production and construction remained relatively weak, particularly in the last quarter of the year, due to unfavourable external conditions and volatile commodity prices. In 2023 as whole, growth is forecast to slow down to 1.0%. Despite the recent downturn in wholesale energy prices and improving economic sentiment, the growth outlook for the first quarter of the year remains weak as consumers and businesses are still facing uncertainties about energy costs in the winter months. Growth is projected to improve somewhat in the second quarter of 2023 and to further pick up thereafter, reaching a full-year rate of 1.8% in 2024 against the backdrop of assumed stronger external demand and more favourable commodity prices.
Headline inflation rose from 9.5% (y-o-y) in 2022-Q3 to 10.2% in 2022-Q4 as the observed acceleration in prices of food and industrial goods outweighed the slowdown in prices of energy and services. The flash estimate for January 2023 confirmed the expectations that the peak in inflation was reached in 2022-Q4, as the headline inflation rate slowed to 8.6% (y-o-y) during the month, reflecting a substantial downturn in the energy price index.
Inflation is projected to slow further over the forecast period in line with the downward correction in wholesale energy prices and the assumed developments in commodity markets. The heavy rainfalls in the Iberian Peninsula over the past months are also expected to support the disinflationary path both on the energy and food markets, partly reversing the negative effects from the severe drought that affected the country until September 2022. The increased level of water reservoirs already appears to contribute to the significant decrease in the wholesale electricity prices on the Iberian market. However, rising wage pressures are expected to keep services prices and core inflation relatively high. Overall, inflation is projected to slow from 8.1% in 2022 to 5.4% in 2023 and 2.6% in 2024.
E-commerce has had a significant impact on Portugal's economic development in recent years. Here are some of the ways in which e-commerce has affected the Portuguese economy: Increased job creation: The growth of e-commerce in Portugal has led to the creation of new jobs in areas such as logistics, marketing, and customer service. E-commerce has also given rise to new business models and startups, further contributing to job creation. Boost to GDP: E-commerce has contributed to Portugal's gross domestic product (GDP), as online sales have increased in recent years. According to a report by the European Commission, e-commerce accounted for 2.6% of Portugal's GDP in 2019. Increased international trade: E-commerce has enabled Portuguese businesses to expand their reach beyond the domestic market, tapping into international markets through cross-border e-commerce. This has increased trade and exports, contributing to Portugal's economic growth. Encouraged entrepreneurship: E-commerce has made it easier for entrepreneurs to start their own businesses, as it allows them to reach a wider audience without the need for a physical storefront. This has encouraged entrepreneurship and innovation in Portugal, leading to the creation of new businesses and employment opportunities. Boosted competitiveness: E-commerce has made it easier for Portuguese businesses to compete with larger international companies, as it allows them to reach customers in different parts of the world. This has boosted competitiveness and helped to level the playing field for smaller businesses. Increased digitalization: The growth of e-commerce in Portugal has contributed to the digitalization of the economy, as businesses have had to adopt new technologies and online sales channels to stay competitive. This has led to greater efficiency and productivity, as well as increased access to digital services and products for consumers. Overall, e-commerce has had a positive impact on Portugal's economic development, contributing to job creation, GDP growth, and increased international trade. It has also encouraged entrepreneurship, boosted competitiveness, and led to greater digitalization of the economy. As e-commerce continues to grow in Portugal, it is likely to play an increasingly important role in the country's economic future.
Improved customer experience: E-commerce has enabled businesses in Portugal to offer a more personalized and convenient shopping experience for their customers. This includes features such as personalized recommendations, easy checkout processes, and fast delivery options. Reduced costs: E-commerce has also enabled businesses to reduce their costs, as they no longer need to invest in physical storefronts and other overhead expenses associated with traditional brick-and-mortar retail. This has enabled businesses to invest in other areas, such as marketing and product development. Increased transparency: E-commerce has made it easier for consumers in Portugal to compare prices and products across different retailers. This has increased transparency in the market, and enabled consumers to make more informed purchasing decisions. Increased digital skills: The growth of e-commerce has also contributed to an increase in digital skills among the Portuguese population. As more people shop online and businesses invest in digital technologies, it has become increasingly important for individuals to have digital skills in order to participate in the economy. Contributed to regional development: E-commerce has also contributed to regional development in Portugal, as businesses in different parts of the country are able to reach customers beyond their local markets. This has enabled businesses in more remote or rural areas to participate in the digital economy and benefit from its growth. Facilitated access to finance: E-commerce has made it easier for businesses in Portugal to access finance, as online sales data can be used as collateral for loans. This has enabled businesses to access capital more easily, and to invest in growth and expansion. Increased efficiency in supply chain: E-commerce has enabled businesses in Portugal to streamline their supply chain and inventory management processes, reducing waste and increasing efficiency. This has also led to faster order processing and delivery times, which has improved the customer experience. Improved social inclusion: E-commerce has also contributed to social inclusion in Portugal, as it has enabled people with disabilities or limited mobility to participate in the economy more easily. Online shopping has also made it easier for people in remote areas to access a wider range of products and services.
Enhanced data analytics: E-commerce has enabled businesses in Portugal to collect and analyze data on customer behavior and preferences, enabling them to make more informed decisions on product development, marketing, and pricing. This has also facilitated the development of new products and services that better meet customer needs. Increased environmental sustainability: E-commerce has also contributed to environmental sustainability in Portugal, as it has reduced the need for transportation and physical storefronts, which can have a negative impact on the environment. Online shopping has also enabled businesses to adopt more sustainable practices, such as using environmentally-friendly packaging materials. Overall, e-commerce has had a far-reaching impact on Portugal's economic development, contributing to job creation, GDP growth, international trade, entrepreneurship, digitalization, customer experience, cost reduction, transparency, regional development, access to finance, supply chain efficiency, social inclusion, data analytics, and environmental sustainability. As e-commerce continues to evolve in Portugal, it is likely to remain a key driver of the country's economic growth and development. Skip to main content This site uses cookies to offer you a better browsing experience. Find out more on how we use cookies. Accept all cookies Accept only essential cookies An official website of the European UnionHow do you know? European Commission logo EN English Search Search Economy and Finance Home Economic surveillance of EU economies Portugal Economic forecast for Portugal Economic forecast for Portugal The latest macroeconomic forecast for Portugal.
Last update (13/02/2023) Winter 2023 Economic Forecast: EU Economy set to avoid recession, but headwinds persist Portugal’s economy continued growing in the final quarter of 2022, despite challenging global conditions. According to the flash estimate, GDP increased by 0.2% (q-o-q) in 2022-Q4, after growing by 0.1% and 0.4% in the previous two quarters. On an annual basis, growth in 2022 is estimated at 6.7%, up from 5.5% in 2021. Private consumption and net exports contributed significantly to the expansion, benefiting from a strong rebound in tourism after the lifting of COVID-19 restrictions. On the production side, industrial production and construction remained relatively weak, particularly in the last quarter of the year, due to unfavourable external conditions and volatile commodity prices. Indicators 2022 2023 2024 GDP growth (%, yoy) 6,7 1,0 1,8 Inflation (%, yoy) 8,1 5,4 2,6 In 2023 as whole, growth is forecast to slow down to 1.0%. Despite the recent downturn in wholesale energy prices and improving economic sentiment, the growth outlook for the first quarter of the year remains weak as consumers and businesses are still facing uncertainties about energy costs in the winter months. Growth is projected to improve somewhat in the second quarter of 2023 and to further pick up thereafter, reaching a full-year rate of 1.8% in 2024 against the backdrop of assumed stronger external demand and more favourable commodity prices. Headline inflation rose from 9.5% (y-o-y) in 2022-Q3 to 10.2% in 2022-Q4 as the observed acceleration in prices of food and industrial goods outweighed the slowdown in prices of energy and services. The flash estimate for January 2023 confirmed the expectations that the peak in inflation was reached in 2022-Q4, as the headline inflation rate slowed to 8.6% (y-o-y) during the month, reflecting a substantial downturn in the energy price index. Inflation is projected to slow further over the forecast period in line with the downward correction in wholesale energy prices and the assumed developments in commodity markets. The heavy rainfalls in the Iberian Peninsula over the past months are also expected to support the disinflationary path both on the energy and food markets, partly reversing the negative effects from the severe drought that affected the country until September 2022. The increased level of water reservoirs already appears to contribute to the significant decrease in the wholesale electricity prices on the Iberian market. However, rising wage pressures are expected to keep services prices and core inflation relatively high. Overall, inflation is projected to slow from 8.1% in 2022 to 5.4% in 2023 and 2.6% in 2024. Share this page More share options Economy and Finance This site is managed by the Directorate-General for Economic and Financial Affairs About us Economic and Financial Affairs Follow us EU Economy & Finance Subscribe to ECFIN E-news Subscribe to ECFIN New Publication Related sites Business, Economy, Euro European Commission logo Contact the European Commission Follow the European Commission on social media Resources for partners Languages on our websites Cookies Privacy policy Legal notice.