Portugal GDP Q2 2016


GDP growth disappoints again in Q2

A preliminary estimate released by the National Statistics Institute on 12 August showed that Portugal’s GDP increased 0.2% in Q2 over the previous quarter in seasonally-adjusted terms. Q2’s growth rate matched the pace observed in Q1, but marked another quarter of disappointing growth as markets had expected a 0.3% rise.

In a statement, the Statistical Institute said that the subdued figure in Q2 was mainly the result of a positive contribution from net exports, while growth in domestic demand was null.

On an annual basis, the economy continued losing momentum and moderated from a 0.9% increase in Q1 to a 0.8% expansion in Q2. The print marked the slowest increase since Q4 2014. More detailed data will be published on 31 August.

In June, the Bank of Portugal cut its growth projection and expects the economy to expand 1.3% in 2016, which was revised down from its previous 1.5% projection and undercuts the government’s optimistic forecast of 1.8% growth this year. For 2017, the Bank sees economic growth at 1.6%, slightly under the 1.7% increase it had projected previously. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.1% in 2016, which is down 0.2 percentage points from last month’s projection. For 2017, the panel foresees the economy growing 1.3%.

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Portugal GDP Chart

Portugal GDP Q2 2016 0

Note: Year-on-year and annual average variation in %.
Source: Statistics Portugal (INE) and FocusEconomics calculations.

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