Portugal: Economy accelerates in Q4, with GDP growth rising to 17-year high in 2017
February 14, 2018
The economy’s momentum strengthened further in the final quarter of 2017, according to a flash GDP estimate released by the National Statistics Institute (INE) on 14 February. GDP expanded 0.7% over the previous quarter, up from a 0.5% quarter-on-quarter expansion in the third quarter, marking the best result since Q4 2016.
On an annual basis, economic growth in the fourth quarter was broadly unchanged, dipping marginally from the third quarter: GDP grew 2.4% year-on-year, coming in just below the previous quarter’s 2.5% annual growth. Overall, the economy experienced a noteworthy turnaround in 2017, with full-year GDP growth soaring to a 17-year high of 2.7% (2016: 1.5%). A thriving tourism sector, robust export performance, strong real estate investment and healthy private consumption powered the stellar upturn.
A comprehensive breakdown of the quarter-on-quarter result has yet to be released, but the preliminary estimate indicates that the external sector returned to making a positive contribution to growth, following a drag on growth in the previous quarter, as exports outpaced imports. On the downside, domestic demand is expected to have lost steam, largely due to a slowdown in private consumption.
A detailed breakdown of the results will be released on 28 February.
Portugal GDP Forecast
The Bank of Portugal projects the economy expanding 2.3% in 2018 and 1.9% in 2019. FocusEconomics Consensus Forecast panelists expect GDP to expand 2.1% in 2018, which is unchanged from last month’s forecast, and 1.9% in 2019.