Portugal: Economy cools in Q2, but overall economic picture remains healthy
August 22, 2017
According to a preliminary estimate released by the National Statistics Institute (INE) on 14 August, GDP growth in Q2 came in at 0.2% quarter-on-quarter. The figure was likely depressed by an unfavorable base effect, after barnstorming growth of 1.0% qoq in Q1. Despite the slowdown, the economic panorama remains the healthiest it has been since the advent of the financial crisis. Business and consumer confidence have risen significantly so far this year, the tourism industry is booming and the fiscal deficit is trending downwards. On a year-on-year basis, growth was clocked at 2.8% in Q2, mirroring the prior quarter’s figure which had marked the fastest rate in roughly a decade.
Although a comprehensive breakdown of the result is not yet available, the Institute reported that the external sector dragged down the quarter-on-quarter figure, while domestic demand propped up growth, although the contribution from fixed investment was less positive than in Q1.
Author: Oliver Reynolds, Economist