Portugal GDP Q3 2021


Portugal: Economic growth slows in Q3

November 30, 2021

According to a preliminary estimate, GDP growth lost steam in the third quarter, falling to 2.9% on a seasonally-adjusted quarter-on-quarter basis, from 4.4% in the second quarter. The slowdown was mainly due to a less favorable base effect, after the lifting of lockdown measures boosted growth in Q2.

Household spending growth slowed to 1.9% in seasonally-adjusted quarter-on-quarter terms in Q3 from a 7.5% expansion in Q2, while government spending growth moderated to 1.2% in Q3 (Q2: +3.1% s.a. qoq). Moreover, fixed investment contracted 1.8% in Q3, marking the worst result since Q2 2020 (Q2: -0.5% s.a. qoq).

On the external front, exports of goods and services bounced back, growing 9.6% in the third quarter (Q2: -2.2% s.a. qoq). Notably, exports benefited from increased tourism activity. In addition, imports of goods and services rebounded, growing 4.4% in Q3 (Q2: -0.4% s.a. qoq), marking the best reading since Q4 2020.

On an annual basis, economic growth waned markedly to 4.2% in Q3, following the previous quarter's 16.1% expansion.

Commenting on the outlook for 2022, analysts at the EIU said:

“In 2022, with all restrictions removed, goods exports and investment will generate a meaningful recovery […]. However, Portugal's dependence on tourism will keep services exports lower than before the crisis, because the tourism sector is unlikely to return to pre-pandemic levels of activity before 2023. Private consumption will also contribute to growth but will remain subdued as consumers maintain a high level of precautionary savings.”

FocusEconomics Consensus Forecast panelists see GDP climbing 4.9% in 2022, which is down 0.1 percentage points from last month’s forecast. In 2023 the economy is seen growing 2.4%.

Author:, Junior Economist

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Portugal GDP Chart

Portugal GDP Q3  2021 0

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

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