Portugal flattens coronavirus curve, but too early to reopen economy

By Catarina Demony and Sergio Goncalves

LISBON (Reuters) – Portugal’s coronavirus curve has flattened but the good news is still not enough for the country to lift lockdown measures and reopen its tourism-dependent, export-oriented economy, government ministers said on Wednesday.

Portugal has so far reported 18,091 cases and 599 deaths, far below more populous Spain, where more than 18,000 people have died. Health Secretary Antonio Sales said Portugal’s coronavirus death rate is 5.5% per 100,000 people, lower than in most European nations.

Sales said told a news conference the curve flattened due to the “excellent behaviour and civism of the Portuguese people” who obeyed lockdown rules imposed by the government from March 18.

Portuguese President Marcelo Rebelo de Sousa will extend the nationwide lockdown until May 1.

Though the developments are positive, Prime Minister Antonio Costa said earlier on Wednesday the time to “gradually and progressively” reopen the economy had yet to come.

“We can only resume activities when we have the needed certainty and comfort, and sufficient confidence in society, that by reopening it we don’t increase the risk of contamination beyond what is controllable,” Costa told RTP television.

The massive gap in the number of cases and mortality rate between Portugal and other countries is hard to explain. Some experts and doctors have pointed to the fact that Portugal restricted movement of people early on, when cases were still in their hundreds and with just two deaths.

Costa made his comments a day after the International Monetary Fund (IMF) said that Portugal’s economy will contract by 8% this year, way above the central bank’s predictions last month of a drop between 3.7% and 5.7%.

Speaking at an online conference organised by daily Jornal de Negocios, Economy Minister Pedro Siza Vieira said the second quarter of this year will be the “toughest in our economic history”.

The month of April will be “the worst of all” but signs of recovery could start appearing in May, he said.

The unemployment rate that has been falling for several years as the country slowly recovered from a severe debt crisis, should more than double to 13.9% this year, the IMF said, expecting the budget deficit to spike to 7.1% after a surplus of 0.2% in 2019 – Portugal’s first in 45 years of democracy.

Public debt will skyrocket to a record of 135% of GDP in 2020, compared to 118% last year, the Fund said.

“We know that some companies will fall by the wayside and there are jobs that will be irretrievably lost,” Siza Vieira said.

The impact of the outbreak on Portugal’s economy has already hit various sectors, from the booming tourism industry to car firms.

Portugal’s Automotive Trade Association ACAP said on Wednesday that between April 1 to 14 the country’s car market fell 86% to 838 sales compared to 6,208 during the same period last year.

“The automotive sector is undoubtedly one of the most affected by this serious crisis,” ACAP said.

(Reporting by Catarina Demony, Sergio Goncalves and Victoria Waldersee, Editing by Andrei Khalip and Angus MacSwan)