Portugal: Economy rebounds sharply in Q3, but strong momentum will not carry into Q4
October 30, 2020
A GDP estimate released by the National Statistics Institute on 30 October showed the economy rebounded 13.2% in seasonally-adjusted quarter-on-quarter terms in Q3, after contracting 13.9% in Q2. In annual terms, GDP contracted 5.8% in Q3 (Q2: -16.4% year-on-year).
Although no breakdown was available with the flash release, the rebound was likely driven by recovering exports and private consumption following the lifting of restrictions at the end of Q2.
On to Q4, prospects are downbeat as increasing Covid-19 cases have led to the imposition of new social-distancing measures. Most recently, a curfew was imposed until 23 November in 121 municipalities comprising 70% of the population. Taken together, the measures are set to cause severe harm to both private consumption and tourism.
Author: Frederico Teixeira de Abreu, Junior Economist