The Portuguese central bank Tuesday issued a gloomy economic forecast, saying the economy will contract 3.1 per cent in2012, dpa reported. The recession will thus deepen from 2011, when the economy shrank by 1.6 per cent, the Bank of Portugal said in its winter bulletin. The economy will only begin to recover in 2013, when it will grow by 0.3 per cent. The central bank's forecasts were even worse than those of the European Union and the International Monetary Fund, which have granted Lisbon a bailout worth 78 billion euros (100 billion dollars). Private consumption will go down 6 per cent this year, the central bank said. Prime Minister Pedro Passes Coelho's government has adopted austerity policies, which critics see as paralyzing the economy.
