Portugal: Economy contracts in Q1
May 15, 2014
In Q1, GDP contracted a seasonally-adjusted 0.8% over the previous quarter according to data released by Statistics Portugal on 15 May. The drop contrasted the revised 0.6% increase tallied in Q4 (previously reported: +0.5% quarter-on-quarter) and marked the first contraction following three consecutive quarters of expansion.
GDP expanded 1.2% in annual terms, which was down from the 1.6% rise recorded in Q4 2013 that had marked the fastest increase since Q3 2010.
According to Statistics Portugal, the Q1 contraction came on the back of a negative contribution from the external sector, whereas domestic demand improved in the first quarter, due specifically to an expansion in investment.
The Bank of Portugal expects the economy to expand 0.8% in 2014 and 1.3% in 2015. FocusEconomics Consensus Forecast panelists expect that GDP will expand 0.9% in 2014, which is up 0.2 percentage points from last month's projection. For 2015, the panel expects economic growth to accelerate to 1.3%.