Portugal is facing a deeper recession than had been expected, dpa quoted the Bank of Portugal as saying Tuesday. The bank estimated that the economy will contract by 1.9 per cent in 2013. In November, the central bank had forecast a contraction of 1.6 per cent. Prime Minister Pedro Passos Coelho's government expects gross domestic product to shrink by 1 per cent. In 2012, the economy is estimated to have shrunk by 3 per cent. The central bank based its new forecast on likely weaker exports. In 2014, the economy may again grow by 1.3 per cent, if the government does not adopt new austerity measures, the Bank of Portugal said. Portugal has adopted tough austerity policies in agreement with the European Union and the International Monetary Fund, which have granted it a bailout worth 78 billion euros (100 billion dollars). President Anibal Cavaco Silva meanwhile called for measures to boost growth and employment instead of austerity.
