PORTUGAL'S GDP FORECAST TO GROW FOUR PCT THIS YEAR
Portugal's Gross Domestic Product (GDP)
will grow around four pct this year, the same rate as in 1986,
according to a Bank of Portugal forecast.
    Total investment this year, the country's second as a
member of the European Community (EC), will rise nearly 10 pct,
again the same rate as last year, the central bank study said.
    It added that Portugal's current account was forecast to
show a surplus of 400 mln dlrs this year compared with 1.13
billion in 1986 and 369 mln the previous year.
    Last year's high surplus was attributed to cheaper oil and
raw materials, lower world interest rates and a weaker dollar.
    Imports by volume were forecast to grow 10 pct this year
and exports four pct compared with increases of 16.5 pct and
6.6 pct respectively in 1986, the bank said.
    The forecasts were calculated on the assumption that the
non-expansionary monetary policy carried out by the current
government would be maintained, particularly in budget spending
and income and in wage policy.
    The bank added that the 1987 forecasts were also based on
the assumption that the international economic situation and
Portugal's world trade relations would remain more or less the
same as in 1986.
    The central bank said the high rate of investment estimated
for 1986 was due to government policies and to increasing
optimism among firms whose financial situation had improved
since 1985. This tendency was expected to continue this year,
especially in the construction and public works sectors.
    Financial aid from the EC had also helped to boost
investment last year, the bank said.
 REUTER
