Lisbon, Portugal street

Portugal GDP Q4 2021

Portugal: Economy records slower increase in Q4

According to a preliminary reading, GDP growth waned to 1.6% on a seasonally-adjusted quarter-on-quarter basis in the fourth quarter, from 2.8% in the third quarter. Q4’s reading marked the slowest growth since Q1 2021.

Household spending growth fell to 1.0% in Q4, marking the weakest expansion since Q1 2021 (Q3: +1.7% s.a. qoq), namely due to a fall in consumption of non-durables; spending on durables rebounded in the quarter. Public consumption contracted 0.6% (Q3: +1.5% s.a. qoq). Meanwhile, fixed investment rebounded, growing 3.5% in Q4 and contrasting the 1.8% decrease logged in the prior quarter, due to a rebound in investment in machinery and equipment.

Exports of goods and services increased 8.9% on a seasonally-adjusted sequential basis in the fourth quarter, which was below the third quarter’s 9.4% expansion. Conversely, imports of goods and services growth picked up to 7.0% in Q4 (Q3: +4.5% s.a. qoq).

On an annual basis, economic growth sped up to 5.8% in Q4, from Q3’s 4.4% growth.

Commenting the outlook for 2022, analysts at the EIU said:

“Compared with the wider euro area average, Portugal’s recovery has been stronger, but this partly reflects the sharper contraction registered in 2020 following the outbreak of the pandemic in March that year (8.4% compared with a euro area average of 6.5%). In 2022, goods exports and investment will generate a meaningful recovery, and we expect the economy to expand by 5.4%. In 2023–2025 Portugal’s growth rate, boosted by strong export growth and public investment, will be above the euro zone average, reflecting a resumption of the convergence process that had been on track since the end of the financial crisis.”

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