Portugal GDP Q2 2021


Portugal: Economy bounces back in Q2

July 30, 2021

According to a preliminary reading, GDP bounced back in the second quarter, growing 4.9% on a seasonally-adjusted quarter-on-quarter basis and contrasting the 3.2% contraction logged in Q1. It is worth noting, however, that the first quarter was marked by tight restrictions, which were only eased in April. Although a detailed breakdown is not yet available, the release showed that domestic demand contributed positively to the reading, while net exports still subtracted from growth, although to a lesser extent than in Q1.

On an annual basis, the economy rebounded in Q2, with GDP increasing 15.5% and contrasting the previous quarter's 5.3% fall. However, this was mainly due to a favorable base effect as GDP tumbled 16.3% in the same quarter of 2020.

Looking at the third quarter, a spike in Covid-19 cases in July led to some localized restrictions—including limits on group sizes in restaurants and curfews in hotspot areas—which should have had some impact on activity. That said, all curfews were lifted on 1 August, which, coupled with the ongoing vaccine rollout, should boost momentum as August is the most lucrative month for tourism revenues.

Commenting on Q2’s outturn and the outlook for the rest of the year, Ricardo Amaro, economist at Oxford economics, said:

“The latest retail sales figures are pointing to a very strong Q2 rebound in consumer spending, which has underpinned an upward revision to Q2 GDP growth. This has more than compensated for the slight downgrade to H2 growth due to a further increase in new coronavirus cases in recent weeks.”

FocusEconomics Consensus Forecast panelists see GDP climbing 3.9% in 2021, which is up 0.2 percentage points from last month’s forecast. In 2022 the economy is seen growing 5.0%.

Author:, Junior Economist

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Portugal GDP Chart

Portugal GDP Q1  2021

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

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