Portugal GDP Q1 2016


GDP growth slows in Q1 and shows disappointing performance at the outset of the year

A preliminary estimate, published by the statistical office on 13 May, showed that Portugal’s GDP increased 0.1% in Q1 over the previous period in seasonally adjusted terms. The result marked a mild deceleration compared to the 0.2% increase observed in Q4 2015 and contrasted the 0.4% rise the markets had expected.

In its statement, the statistical office said that the quarterly deceleration was mainly the result of a deterioration in net exports, due to weaker global demand. Growth, however, continued to be supported by domestic demand.

On an annual basis, the economy lost steam in the first quarter and decelerated from a 1.3% increase in Q4 2015 to a 0.8% expansion in Q1. The print marked the slowest increase since Q4 2014. More detailed data will be published on 31 May.

The Bank of Portugal expects the economy to expand 1.5% this year and is less optimistic than the government’s forecast of 1.8% stipulated in the 2016 budget. FocusEconomics Consensus Forecast panelists expect GDP to expand 1.3% in 2016, which is down 0.1 percentage points from last month’s projection. For 2017, the panel foresees the economy growing 1.6%.

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Portugal GDP Chart

Portugal GDP Q1 2016

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

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