The Portuguese central bank forecast Friday that the country's gross domestic product (GDP) would retract 1.3 percent in 2011.
If the forecast proves to be real, it would mean that the Portuguese economy would have the same size it had in 2009. In 2010, the economy registered a 1.3 percent GDP growth, one of the largest in the European Union.
The main reason for the retraction is the economic measures the government is taking to cope with the debt crisis. The measures include higher taxes, wage cuts and less spending by the government.
The curve of the economy started to bend down in the fourth quarter of 2010. During that period, the economic activity had a 0.1 percent retraction, compared to the 0.2 percent growth in the third quarter.
Private consumption contracted 0.5 percent. On the other hand, the international trade registered a positive impact on the economy: exports grew 13 percent and imports expanded only 4.5 percent.