Portugal GDP Q3 2021


Portugal: Economic growth moderates in the third quarter

October 29, 2021

According to a preliminary estimate, GDP growth moderated to 2.8% on a seasonally-adjusted quarter-on-quarter basis in the third quarter, from 4.5% in Q2. On an annual basis, economic growth slowed markedly to 4.2% in Q3, down from the previous period's 16.2% expansion.

Although a detailed breakdown is not yet available, early data shows that domestic demand contributed positively to the print, despite losing some momentum. Meanwhile, the external sector rebounded from Q2, with tourism activity increasing throughout the quarter.

Going forward, the rejection of the 2022 draft budget in parliament, which has triggered snap elections on 30 January, means that the 2021 budget will be rolled over until a new bill is passed. Moreover, there is a risk that parliament will remain fractured after the election. This in turn threatens the outlook for 2022, as a significant portion of EU funds—which are key to investment—require the approval of a budget. More positively, a well vaccinated population should provide some protection against future Covid-19 outbreaks and restrictions, boding well for household spending.

FocusEconomics Consensus Forecast panelists see GDP climbing 4.3% in 2022, which is up 0.1 percentage points from last month’s forecast. In 2023, the economy is seen growing 5.0%.

Author:, Junior Economist

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Portugal GDP Chart

Portugal GDP Q3  2021

Note: Quarter-on-quarter and year-on-year changes in GDP in %.
Source: Statistics Portugal (INE) and FocusEconomics calculations.

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