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LISBON, March 25 (Reuters) – Portugal’s Finance Minister Mario Centeno said on Wednesday that all scenarios pointed to an economic recession due to the impact of the coronavirus and restrictive measures implemented to stem the pandemic.
“We are working on scenarios to return to normality, but we will always be talking about a scenario of annual recession,” Centeno told a news conference.
Helped by solid economic growth of 2.2% last year, Portugal earlier on Wednesday reported a budget surplus of 0.2% of gross domestic product in 2019 – its first in 45 years of the country’s democratic history – after a deficit of 0.4% in 2018.
But the projected economic slump in Portugal and globally, combined with an abrupt strain on public finances due to the virus, means that the country would likely slide back to deficit this year, the finance minister said.
The government last Wednesday announced a 9.2 billion euro ($9.98 billion) package worth 4.3% of annual GDP to support workers and provide liquidity for companies affected by the coronavirus outbreak, on the same day it declared a state of emergency which has closed non-essential businesses and suspended thousands of jobs.
“The nature of this crisis is very different from what we faced in 2008 to 2009…. we are dealing with a temporary crisis by an exogenous shock to the economic system which affects our productive capacity with an intensity never seen before,” Centeno said.
Portugal has 2,995 confirmed cases of coronavirus, with 43 reported deaths, far below other southern European countries such as Italy and Spain.
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