In its latest ‘World Economic Outlook' report, the OECD sees Portugal’s economic growth remaining “stable” at around 2% this year and next.

For this year, the OECD is sticking to the forecast it released in May, for growth in gross domestic product of 2.2%, just below the 2.3% estimated by the government.

For next year, the OECD has slightly cut the forecast, from the 2.2% it was previously projecting, which was in line with the government’s current forecast.

On the other hand, for 2020 the organisation is more optimistic than the government in that it predicts that GDP will swell by 1.9%, against a government projection of 1.7%.

Domestic demand and exports will lead the contribution to growth, in particular domestic consumption, which the OECD expects to "remain solid" as the jobless rate falls. However, it sees rising labour costs leading to a Increase in inflation.

An expected slowdown in major European economies will have an impact on the future, the organisation says.

However, the OECD does see the budget deficit disappearing by 2020, while stressing that policy measures to bolster public finances "will have to continue”, nevertheless.

"After being slightly expansionary in 2018, the budgetary stance is projected to be broadly neutral in 2019 and 2020", it states, arguing that the government should maintain the goal of balancing the books in order to sustain the economic recovery.

“The government's plans to achieve a balanced budget by 2020 are appropriate" and any unexpected additional revenues should be used to reduce the mountain of public debt, given that its ratio to GDP remains "extremely high” at more than 120%.

There is, the OECD argues, scope to increase ‘green’ taxes, for example with higher levies on energy to reflect the impact on the environment. In addition, the organisation argues that new companies could see investment in research and development refunded.

The economic "risks" remaining include a "tightening of financial conditions", in the form of an increase in market interest rates, which could undermine Portugal’s financial situation due to its huge public debt, non-performing loans in the bank sector, and any fresh increases in oil prices.

On the positive side would be moves to complete the euro-zone banking union – something that, according to the OECD, would boost confidence and investment in Portugal.