Looking ahead, we expect the economy to slow further in 2020.

We see two main reasons for this. First, we think that consumption growth will ease further. The unemployment rate stopped edging downwards since the end of 2018 and since then hovers around 6.6%. Consumption was, therefore, less supported in 2019. As overall hiring intentions didn't move much higher in recent months, we don't expect the unemployment rate to come down significantly soon. Second, investment growth is also bound to decelerate. It already slowed in 2019, but still remains at a high level. Moreover, capacity utilisation in the industry started to decline over the course of 2019, leading to less requirement for new investment.

The new minority government, led by the socialist António Costa, is expected to continue with prudent fiscal policy and so the high level of government debt as a percentage of GDP is expected to fall further in the years ahead.

During the election campaign before the October elections, Costa said that Portugal needs to stay on the path of fiscal consolidation in order to be stronger for potential storms ahead. As we expect the interest rate on Portuguese government debt will hover around current low levels in 2020, doing so will be easier.