Portugal: ‘Bank of Portugal recession prediction reinforces threats to budget’

A sharp slowdown in exports has again forced the Bank of Portugal to review its forecasts for 2013. The GDP is expected to contract by 1.9 per cent while the public deficit may rise by 0.4 per cent to around 4.9 per cent instead of the 4.5 per cent level required by the government and the troika. The Bank of Portugal foresees the loss of 90,000 jobs during 2013. These forecasts come ahead of a Constitutional Court decision on the legality of three elements of the 2013 budget, which were referred to the court by President Aníbal António Cavaco Silva.