4.1. main macroeconomic indicators 4.1. main macroeconomic indicators

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According to the projections, by the end of 2019, the Portuguese GDP growth rate will have decreased 0.5 percentage points (1.9% in 2019 compared to 2.4% em 2018).

This evolution translates into an approximation of the activity growth rate to the estimated potential growth of the economy. This economic growth slowdown is partly due to the deceleration of private consumption to 2.3% when, in 2018, it had registered a 3.1% growth. Notwithstanding the maintenance of favorable financing conditions, the decline is explained by lower consumption of durable goods, since the effects of accumulated latent demand during the crisis will be dissipating.

This behavior thus results in the real increase of the household savings rate, since, in 2019, we witnessed a growth in disposable income. Regarding public consumption, it is expected a 0.5% real growth in 2019. Yet again, it translates into a slowdown compared to the previous year, which had registered an increase of 0.9%. This, to some extent, is a symptom of the reversion of a one-off effect of expenditures related to the 2017 fires (with an impact in the 2018 intermediate consumption).

The Gross Fixed Capital Formation grew strongly in 2019 (7.3%), closely associated with the construction sector, in which large-scale infrastructure projects were carried out, partly through public investment, and that also benefited from European funding.

As to the trade balance, in 2019, Portugal managed to decrease the import growth rate, but also diminish the weight of exports on the GDP. Nonetheless, it saw a market share increase compared to the previous year. It can be inferred that the slowdown in imports reflects the deceleration of exports and of private consumption, which has a high imported content associated. According to the Bank of Portugal projections, the unemployment rate will continue to decrease, after having registered in 2019 its lowest level since 2003, and inferior to trend, settling around 6%.

Gradually designing, since 2007, a downward path, inflation would have decreased again in 2019 to 0.9%, lower than the Eurozone inflation. This decline mostly reflects the evolution of energy goods — which is closely linked to the drop in the price of a barrel of oil —, as well as of the electricity and gas prices. However, there is also a contribution from the non-energy component to the decrease of the price index in the economy, such as a price reduction in public transportation, university tuition fees, prices of school textbooks, among others.

In 2020, it’s expected a further drop of the GDP to 1.6%, based on the slowdown in private consumption, especially in the non-durable goods and services component. It is also estimated that the inflation rate will return to levels registered in 2018 (1.2%).



It is estimated that in 2019 the Angolan economy was very close to having achieved positive growth, with a -0.3% GPD variation, when in the previous year it had registered a 1.2% decrease.

The signs of recovery of both the economy and the health of public finances have been noticeable. In fact, they both presented a positive budget balance — about 2.8% of the GPD — and a primary balance that amounted to 6.6% of the GPD. However, the current performance of this economy has been revised downwards largely due to oil production, which has been less than estimated.

Since the country is linked to the International Monetary Fund (IMF) financial assistance program, which will allow it to receive a 3.7 billion dollars financing over a four-year period, one of the indicators which is more closely monitored is the level of net international reserves, which are expected to exceed 9.4 billion dollars. Angola ended 2019 with a stock of foreign exchange of 11.8 billion dollars, which approximately represents 6 months’ worth of imports of goods and services. The public debt represents about 95% of the GDP. Still, it is estimated that in upcoming years it will have an increasingly smaller weight, to reverse the upward trend already in 2020 (90%), to register 68% in 2024.

The prospects for 2020 are positive, mainly based on the approaching structural reforms, greater political stability, and the financial support of the IMF. Hopefully, the combination of these three factors will sustain the necessary investments and private spending. For the control and stabilization of inflation, which is expected to keep a downward trajectory initiated in 2017, the National Bank of Angola will likely maintain the key interest rate, so it should end at 16.3% in 2020.


The Spanish economy’s growth has been decelerating in the last five years, having registered a 2.2% estimated positive GDP variation in 2019, which is still higher than the 1.1% initially forecasted.

This performance is mainly due to the worsening of the global trading environment, caused by the conflict between the USA and China, the uncertainties around Brexit, and the difficulties that the automotive sector is facing in Europe. On the other hand, these factors had a direct impact on the Spanish exports of goods and services through the demand channel but didn’t indicate lesser competitiveness in relative terms. It is understood that the slowdown observed in 2019 fits into a growth convergence process to levels more in line with the potential growth of the economy.

It is estimated that for 2020, a further 1.8% reduction of the growth rhythm, although the second half of 2019, has recorded an expansionary behavior, maintaining growth rates above those of the Eurozone.

Inflation fell by one percentage point compared to 2018 (1.7% to 0.7%), a result of the effect that the drop in energy prices had on the consumer price index. In 2020, it’s expected that the inflation rate moves to a stationary level around 1.0% since the effect of the fall in prices in energy goods started a contrary behavior in the last quarter of 2019.

The employment indicators show that job creation has fallen more sharply than expected in 2019. Combining this phenomenon with an increase of the active population results in a slowdown of the reduction in the unemployment rate.


In Brazil, growth remained moderate, at 0.9% in 2019, but is due to accelerate to 2% in 2020. This acceleration comes from an improvement in confidence caused by the approval of the pension reform and the reduction of the interest rates of the monetary policy in the context of low inflation. The consistent implementation of the government’s broad fiscal and structural reform agenda will be essential to safeguard the sustainability of the public debt and to boost potential growth.

The growth in the economic activity was not as significant due to low investment an to the fact that the pension reform was only approved in October of 2019. Nevertheless, 2019 was also marked by events damped the main growth drivers, such as the slowdown in household consumption.

Even though the public finance deficit continues to decrease, public debt has grown by 9.6% compared to 2018. However, the value of public debt as a percentage of GPD decreased in 2019 when compared to 2018, an occurrence that happened for the first time since 2013.

It is estimated that inflation remained in 2019 at the same level as in the same period last year, thus meaning a generalized increase in prices in the Brazilian economy by 3.8%. This price level was the result of the price increase in food products. It was also supported by continuing a monetary policy that focuses on maintaining lower interest rates compared to what had been observed in previous periods. The Selic rate was revised several times downward during the second half of 2019, closing the year at 4.5%.

In 2020, it is expected that the Brazilian economy continues the process of economic growth, and it is estimated a 2% GPD growth (about one percentage point above last year). The prospects regarding the evolution of prices in the economy are of a slight decrease compared to what happened in 2019, going from 3.8% to 3.5%.


The real GDP, which had peaked at 6.1% in 2015, contracted around 0.2% in 2019, after a 0.1% contraction in 2018. Aggregate demand fell sharply since 2017 when the government initiated the tax consolidation to remedy the growing imbalances in public spending and of the drop in tax revenue related to the Southern African Customs Union (SACU). The Inflation estimated for 2019 was 4.8% in 2019 and is expected to remain within the 3% to 6% target in the medium term. The Current Account deficit is estimated to have been set at 3% of the GDP in 2019, confirming the improvement trend since 2017, since once exports showed signs of recovery, import growth weakened due to the reduced economic activity.

The GDP growth is expected to recover to 1.6% in 2020, and 2.4% in 2021, primarily sustained by the development of sectors such as industry and construction. However, the weak prospects for economic activity in South Africa may decrease the external demand and reduce SACU’s revenues.


The real GDP is estimated to have grown 3.5% in 2019, after an average of 4% between 2016 and 2018, a behavior driven by the continued recovery of the mining sector (diamond extraction) and the generalized expansion of the economic activity unrelated to extraction.

Concerning inflation, it is estimated that it will remain stable in 2019, at around 3.1%, similar to the values recorded between 2015 and 2018 (with an average rate of 3%). Low inflation reflects a combination of low domestic demand and controlled increases in external prices.

Public debt remains at low levels and is estimated to reach 23% of the GDP in 2019. The external position remains moderate, although the Current Account surplus shows signs of reduction, expected to fall to 1.0% of the GDP in 2019, similarly to the 1.9% recorded in 2018. Given the volatility of diamond exports, the government decided to finance public investments by reducing reserves at the expense of contracting external debt.

Although international reserve buffers have been decreasing since 2016, their levels remain high. The medium-term outlook remains positive, with a projected growth of 4.3% in 2020, and 5.1% in 2021.

Nonetheless, the country’s dependency on diamond exports, the high unemployment — especially among the younger population—, as well as the profound social inequalities found, are factors that compromise the better performance of Botswana’s economy in the near future.


Mozambique faced an economic slowdown in 2019, with a 1.8% GPD growth, mostly explained by the impact of the Idai and Kenneth cyclones.

Together, and due to the drop in foreign direct investment, the economic activity was already showing a slowdown between 2016 and 2018, with an average growth rate of 3.7%, compared to 6.7% in 2015. Regarding inflation, as a result of a monetary policy of contraction, the rate fell to 3.9% in 2018, and 3.4% in 2019, reversing the high levels recorded in 2016 and 2017. It is estimated a GDP growth of around 6% in 2020 and about 4.0% in 2021, boosted by the finding of gas reserves. Mozambique now has the opportunity to diversify the economy and simultaneously improve its competitiveness — modernizing agriculture, electrifying the country through different energy solutions, and promoting other industries, such as fertilizers, fuels, and metalworking. Besides, the need for infrastructure to exploit these resources should trigger a cycle of private and public-private investments.

The current account deficit increased to 54.2% of the GDP in 2019 (against 29.5% in 2018), and is expected to reach a level of 65% of the GDP in 2020 and 2021, as projects related to gas exploration will lead to a substantial increase on the volume of imports.

Simultaneously, the public finance deficit is expected to reach 4.5% of the GDP in 2020 and 4.3% in 2021, which raises concerns about the sustainability of public debt.


The Northern American economy is close to breaking the record for the most prolonged period of growth in the last 170 years. The unemployment rate also fell to the lowest levels recorded since the 1960s.

However, the growth of the US economy decelerated somewhat in 2019 to 2.4%, and the outlook is to maintain this slowdown throughout 2020, with the estimate fixed at 2.1%. This trend is, to no small extent, a consequence of the protectionist measures already in place — increased trade tariffs on products —, trade tensions with the main economic partners, and the reduced impact of fiscal stimuli.

In 2019, the Federal Reserve chose to adopt a more accommodative approach in monetary policy, which is expected to continue throughout 2020. In this context of modest economic growth, the inflation rate is expected to remain around 2.0% in the coming years (in line with the Fed target). The oil prices, that were kept under control during 2019 (compared to 2018), supported the low inflation rates (around 1.8%). In 2020, the combination of tariffs imposed on Chinese imports and the maturity of the economic expansion cycle is expected to exert upward pressure on prices, although without high levels of inflation being reached, with a forecast of 2.3 %.

The focus on the November 2020 presidential elections has created some instability in domestic policy. Concerning foreign policy, the protectionist measures adopted in 2018 and 2019 are a reflection of the paradigm shift from multilateralism to that of protectionism in the USA.


The Turkish economy registered a 0.2% growth in 2019, a performance significantly below what it had achieved in 2018, and slightly below the prospects formulated for this period. After a period of substantial macroeconomic imbalances, Turkey is currently undergoing macroeconomic adjustment, resulting in a timid growth of 0.2%. Regarding price developments, inflation reached 15.7% in 2019. Last year, the Turkish lira depreciated 10.3%.

The prospects for 2020 are to recover from the growth recorded in 2019, partly supported by a relative institutional stability that was not seen in recent years. Thus, the prospects for 2020 are of a GDP growth of around 3%, and a lower price growth in the economy, which will be about 12.6%.


Czech Republic
It is estimated that the GDP growth will reach 2.6% in 2020, driven by household consumption, reflecting the increase in wage levels combined with the extremely low unemployment rate, however negatively affected by the downward trend in external demand. Consumer price growth remains low, at 2.3%, maintaining the level projected for 2020, with an average rate expected to reach 2.6%.

IMF – World Economic Outlook October 2019


Economic activity has performed well in recent years but shows signs of contraction. Growth slowed in 2019, mainly due to a fragile external environment, although domestic demand remains robust. In this sense, in 2019, the growth of the Austrian economy was 1.6%, with an expectation of 1.7% for 2020. The average inflation rate was 1.5% in 2019, and it is estimated to come close to 1.9% in 2020.

IMF – World Economic Outlook October 2019


The Romanian GDP maintained, in 2019, the level of growth recorded in the most recent years, standing at 4.0%,as a result of the boost of private consumption and investment. It is expected that 2020 will not allow the Romanian economy to repeat this level of growth, setting the estimate at 3.5%, albeit with lower inflation levels, at around 3.3% (compared to 4.2% in 2019).

IMF – World Economic Outlook October 2019


Regarding the GDP, in 2018, Hungary was one of the countries that most grew in Europe, and maintained in 2019 a sound level of growth, standing at 4.9%. In 2020, this strong recovery is expected to slow to around 3.3%. Private consumption will continue to drive growth, although public investment is expected to slow down due to decreasing disbursements from the European Union’s structural funds. In 2019, inflation was set at 3.4% and is expected to remain close to these levels in the coming years.

IMF – World Economic Outlook October 2019
OCDE – Economic Outlook November 2019


In 2019, Croatia continued its path of economic expansion, achieving solid economic growth for the fifth consecutive year, registering a GDP growth of 2.9%, driven largely by private consumption and tourism. At the same time, the greater absorption of funds from the European Union should make it possible to increase public investment in the coming years. The labor market continued to show signs of robustness and wages continued to rise, while import prices helped to keep inflation low, at 1.3%.

IMF – World Economic Outlook October 2019
IMF – Republic of Croatia 2019 Article IV Consultation-Press Release and Staff Report


In 2019, was registered a 2.3% GDP growth and economic growth is expected to be around 2% in 2020 and 2021, as the decline in external demand will affect export growth. In turn, domestic demand will remain relatively stable, mainly due to private consumption, which will be sustained by a job market with low levels of unemployment. In 2019, inflation was set at 2.8% and is expected to remain above 2%, given that the economy operates above its average capacity.

IMF – World Economic Outlook October 2019
OCDE – Economic Outlook November 2019


In Mexico, the economic activity stagnated in 2019 due to political uncertainty. Growth is expected to recover to 1% in 2020, as conditions normalize, namely the ratification of the trade agreement between the United States, Mexico and Canada (USMCA) and the recent easing of monetary policy, that aims to contain the inflation rate, with an average rate of 3.1% expected for 2020 (compared to 3.7% in 2019).

IMF – Outlook for Latin America and the Caribbean