2023 ends recovering from the break in the Q3
More recent economic indicators point to a better performance in Q4. Up to December 24th, the daily economic indicator increased around 6%, while in Q3 advanced by only 2%, supporting the expected rebound of activity in Q4 and suggesting that annual growth in 2023 may stay close to 2,2%, minus 0.2 p.p. than our forecast. For 2024, we see a more moderate pace of growth, reflecting the full impact of higher interest rates (internally and also on the activity of the main trading partners of Portugal) that will be mainly felt in H1 2024, restraining economic growth in this period. The CPI flash estimate for December continues to signal deceleration, slowing to 1,4%, pushing annual inflation to 4,3%, slightly below our forecast. This positive trend was also apparent in the core indicator, that moderated to 2,6% yoy from 2,9% in November.