“Global geopolitical uncertainties and rising energy and commodity prices have led us to revise our GDP growth forecast in 2022 for Portugal from 5.7% to 4.6%, with a possible additional drop depending on the evolution of the conflict in Ukraine”, says the financial rating agency in the report.

S&P explains that the slowdown in 2022 is expected to result from rising energy and raw material prices and the potential negative effects on confidence due to the worsening conflict in Ukraine, despite “Portugal’s minimal direct links with the Russian and Ukrainian economies.

The agency points out that, however, the medium-term prospects for Portuguese GDP growth are favourable, with tourism positioned for a strong recovery in 2022-2023, also reflecting the disbursement of European funds.