Bank of Portugal slashes growth forecast, amid signs of recovery

LISBON, June 11 (Xinhua) -- The Bank of Portugal slashed Portugal's economic growth forecast for 2014 on Wednesday from the previous estimate of 1.2 percent to 1.1 percent.
"This recent evolution was partially conditioned to factors of temporary nature and should be reverted in the next quarters," the central bank said in a press release.
The figure comes after Portugal's National Institute of Statistics announced on Monday that Portugal's GDP fell 0.6 percent between January and March this year. The Bank of Portugal said this was due to temporary factors.
The bank was referring in part to the temporary closure of Galp's biggest oil refinery in Sines, Portugal.
Despite growth in domestic demand, exports were sluggish, with the central bank forecasting exports to grow 3.8 percent instead of 5.8 percent.
Domestic demand contributed the most to Portugal's GDP, and should grow slightly more, at 1.4 percent compared to the previous estimate of 1.3 percent.
The central bank also said next year will see the signs of recovery in the country, forecasting growth of 1.5 percent compared to the previous forecast of 1.4 percent.
Portugal has ended its 78-billion-euro bailout program it signed with the European Commission, the International Monetary Fund and the European Central Bank in May 2011 and now has to rely on self-financing.
A fresh package of stimulus measures by the European Central Bank, which includes lower interest rates, has helped yields in countries like debt-laden Portugal to hit historical lows.