Portugal Sees ‘Significant’ Drop in GDP Before Recovery in 2021

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(Bloomberg) -- Portuguese Finance Minister Mario Centeno expects his country will have a “robust” economic recovery in 2021 following a slump this year due to the coronavirus outbreak.

“In 2020 we’ll lose a significant part of our GDP,” Centeno said in parliament on Thursday. “I’m convinced that in 2021 we’ll have a robust recovery.”

Portugal extended a state of emergency for another two weeks through May 2 to limit movement as it tries to contain the outbreak. President Marcelo Rebelo de Sousa said in a televised address on Thursday night that he hopes he won’t have to sign a new extension. The government hasn’t shut down the economy entirely, with industrial and transport activities allowed to continue operating.

Read more: Bank of Portugal Says 2020 GDP to Contract 3.7% Due to Outbreak

Health services will need to have capacity to respond to an increase in the risk of contagion when containment measures are eased in the future, Prime Minister Antonio Costa said earlier on Thursday. Portugal reported the biggest increase in the number of new confirmed coronavirus cases in six days on Thursday.

The government wants to try to reopen nurseries in May as well as some public services that have been closed since the state of emergency was initially declared on March 18, Costa said. It will also consider starting to open small local stores next month, before moving on to larger shops. Tourism represents about 15% of the country’s gross domestic product, and Costa asked citizens to go on vacation within Portugal this summer to help local businesses.

“It’s here that we help to defend our economy,” he said.

©2020 Bloomberg L.P.

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