LISBON: Portugal’s economic growth is expected to slow down through this year and next, as the country struggles with a systemic banking crisis, the lack of a convincing medium-term fiscal plan and excessive public and private sector leverage. Growth is expected to decline, suffering the effects of the Brexit outcome, with investment and private consumption to slow materially, pushing 2016 growth down to 0.7 percent and 2017 to 0.3 percent, Barclays reported.
Further, the total capital needs for the Portuguese banks is expected at EUR7.5 billion. This includes EUR5 billion for Caixa Geral and potentially EUR2.5 billion for BCP if it cannot meet higher requirements independently. However, this does not take into account the positive effect of the repayment of the contingent convertibles (CoCos) of both banks.
