The slowdown of activity within a framework of full employment is the fundamental concern of the Portuguese economy. On the other hand, inflation continues to increase, whereas the signals in the rest of the Euro Zone are that it is slowing. The alteration of the growth pattern in Portugal has been confirmed, with a slowdown of private consumption and higher investment and exports. The lack of dynamism of the economy is seen in the ongoing reduction of liquidity, confirmed by the M1 and M2 monetary aggregate figures.
Consumer confidence falls The signs of a slowdown continue on the demand side, as well.
Consumer confidence figures show expectations of a clearly downward trend over the year, to stand at the lowest level since 1977. On the other hand, car sales are also sharply lower, and the accumulated figure since the beginning of the year is without parallel during the past five years. On the contrary, expectations in the construction industry and in commerce continue depressed. Only an improvement of this variable, which leads to increasing competitiveness abroad, will allow economic growth to accelerate. Otherwise, economic growth can only accelerate through the use of imported labour.