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Portugal & Spain

The Portuguese economy continues to grow, with a 1% GDP increase recorded for the second quarter of 2023. However, it has been forecasted that the economy’s growth will gradually slow by the end of the year and will keep on declining in 2024, partly because of the influence of high interest rates on domestic demand.

To support the economy and attract new investments, the European Investment Bank and Santander Portugal have signed an agreement to facilitate mid-cap companies’ access to necessary financing. This will lead to the generation of new loans at better conditions for up to Euro 400 million.

The growth in Spain’s GDP, meanwhile, is predicted to be one of the biggest in Europe this year at 2.2%, compared to an EU average of 0.8%. Inflation, meanwhile, is expected to stay at the 3.6% level. Notwithstanding these positive forecasts, data for the second half of 2023 may see some negative trends owing to a decline in tourism and exports. Moreover, high fuel and food prices, together with elevated interest rates, are putting additional pressure on domestic consumption and the housing sector.

One of the most disturbing factors is the continuing rise in Spain’s unemployment rate which, according to recently-published data, climbed 0.73% from August to September.

Following the end of Spain and Portugal’s slow holiday season in September, business has picked up; volumes are still down year on year but are better than in previous months. Asian demand has improved for secondary aluminium and is stable for copper, while continued low demand for brass has resulted in lower prices.