Bank Of Portugal Upgrades 2009 GDP Forecast To -2.7%

Bank Of Portugal Upgrades 2009 GDP Forecast To -2.7%

MADRID (Dow Jones)--The Portuguese economy will shrink 2.7% in 2009, the Bank of Portugal said, in a set of improved forecasts signaling that the pace of economic contraction is slowing. The Lisbon-based central bank said in its quarterly economic bulletin, published Tuesday, that its gross domestic product estimate is improved from its previous projection of a drop of 3.5% because exports and private consumption are showing more favorable trends in the second half of 2009.

Portuguese GDP was flat in 2008 and grew 1.8% in 2007.

The Portuguese economy will contract at a slower pace than other euro-zone peers because its banking sector has resisted turbulence from the global financial crisis and the country didn't suffer from a real estate price correction, the central bank added.

Consumer prices are expected to drop faster than expected, with the country's harmonized consumer price index falling 0.9% this year, compared to a previous forecast of a 0.5% drop.

Central Bank Web Site: www.bportugal.pt

-By Madrid Bureau, Dow Jones Newswires; +34-91 395 8120; djmadrid@dowjones.com;

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November 17, 2009 11:00 ET (16:00 GMT)


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