Portugal GDP


Q3 growth supported by the external sector

In the third quarter, gross domestic product (GDP) grew a seasonally adjusted 0.3% over the previous quarter, according to the National Statistics Office (INE). The reading was virtually unchanged compared to the 0.2% expansion recorded in Q2 (previously reported: +0.3% quarter-on-quarter) and marked the third consecutive quarter of positive growth. On an annual basis, the economy grew 1.4% over the same quarter last year (Q2: +1.4% year-on-year). Growth in the third quarter benefited from the resilience of the external sector, while domestic demand plunged. Private consumption swung to a 0.3% decline over the previous quarter (Q2: +0.3% qoq). Meanwhile, government consumption plummeted from a 3.9% rise in Q2 to a 4.5% drop in Q3. In contrast, fixed investment improved from a 1.6% decline in Q2 to a 0.5% expansion in the third quarter. Exports remained buoyant while imports decelerated markedly, as domestic demand remained fragile. Exports of goods and services increased 6.2% over the second quarter (Q2: +3.8% qoq) while imports decelerated to a 0.6% expansion (Q2: +5.2% qoq) improving the net contribution from the external sector to overall economic growth from a 1.0 percentage-point contribution in the second quarter to a 1.8 percentage-point contribution in the third. At the sector level, growth trends remained broadly unchanged over the previous quarter. Agriculture remained in negative territory while industry and services decelerated compared to second quarter figures. Meanwhile, the European Commission anticipates economic growth to reach 1.3% this year but to decelerate markedly and fall 1.0% in 2011

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