Portugal GDP


Economy contracts less than previously estimated in Q1

GDP contracted a seasonally-adjusted 0.6% over the previous quarter in Q1 (Q4: +0.5% quarter-on-quarter) according to detailed data published by Statistics Portugal on 9 June. As a result, the contraction in GDP was less than the 0.7% drop reported in the preliminary estimate. On an annual basis, the economy grew 1.3% in Q1, which was slightly down from the 1.5% rise tallied in Q4.

According to Statistics Portugal, the contraction tallied in Q1 reflects a deterioration in the external sector as well as a deceleration in domestic demand. Private consumption expanded 0.2% over the previous quarter (Q4: -0.6% qoq), whereas government spending contracted 0.6% (Q4: +1.2% qoq). Moreover, gross fixed investment contracted a strong 4.2% in Q1 after having expanded 4.3% in Q4.

The external sector’s net contribution to overall growth deteriorated in Q1, edging down from minus 0.4 percentage points in Q4 to minus 0.8 percentage points in Q1. Exports of goods and services fell 1.9% over the previous quarter (Q4: +0.7% qoq), which marked the sharpest contraction since March 2009. Meanwhile, imports slowed to a flat reading in Q1 (Q4: +1.7% qoq).

The Bank of Portugal expects the economy to expand 0.8% in 2014 and 1.3% in 2015. FocusEconomics Consensus Forecast panelists expect that GDP will expand 0.9% in 2014, which is up 0.2 percentage points from last month’s projection. For 2015, the panel expects economic growth to accelerate to 1.3%.


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Portugal GDP Chart

Portugal GDP Q1 2014

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: Statistics Portugal (INE) and FocusEconomics Consensus Forecast.

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