December 17, 2019 / 1:43 PM / 2 months ago

UPDATE 1-Bank of Portugal sees growth slowing down to 1.7% next year

(Adds other projections, background)

LISBON, Dec 17 (Reuters) - The Bank of Portugal on Tuesday forecast economic growth to slow down to 1.7% next year, a more pessimistic outlook than recent government projections, mainly due to weaker export growth amid global trade uncertainty.

The predicted expansion in 2020 came just hours after the Socialist government unveiled its draft budget for next year in which it projects a higher growth rate of 1.9%, the same as its forecast for this year.

The central bank projected a growth rate of 2% in 2019, after a rate of 2.4% in 2018, describing this year as “less favourable” due to weaker world trade.

In its latest economic outlook, the bank put the expansion in 2021 and 2022 at 1.6%.

It said exports should grow around 2.8% between 2019 and 2022, less than in previous years, reflecting “weaker external demand and smaller market share gains”.

Employment is expected to continue to grow but at a progressively lower rate, the bank said, adding that the unemployment rate should fall to an “historic low level” of 5.6% in 2022, compared to 6.3% this year. (Reporting by Andrei Khalip and Catarina Demony, editing by Ed Osmond)

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