Portugal GDP Q2 2021


Portugal: GDP bounces back in the second quarter

August 31, 2021

A second estimate confirmed that GDP rebounded, expanding 4.9% on a seasonally-adjusted quarter-on-quarter basis in the second quarter, above the 3.2% contraction seen in the first quarter, as restrictions were severely tightened throughout the better part of Q1.

Private consumption rebounded, growing 8.8% seasonally-adjusted quarter-on-quarter in Q2, contrasting the 4.2% contraction in Q1, benefiting from stronger spending on both durable and non-durable goods. Government spending bounced back, growing 2.7% in Q2 (Q1: -1.1% s.a. qoq). Meanwhile, fixed investment contracted 2.1% in Q2, marking the worst result since Q2 2020 (Q1: +3.5% s.a. qoq), with investment in transport equipment, other machinery and equipment and construction all losing steam.

On the external front, exports of goods and services declined at a more moderate rate of 2.0% in Q2 (Q1: -2.6% s.a. qoq), with merchandise goods sales falling but services exports rebounding, as tourism regained ground in May–June. Conversely, imports of goods and services deteriorated, contracting 0.8% in Q2 (Q1: +0.1% s.a. qoq).

On an annual basis, GDP grew 15.5% in Q2, contrasting the previous quarter's 5.3% contraction.

On the outlook, Paula Carvalho, economist at BPI, said:

“The scenario for economic growth faces some uncertainty, as new Covid-19 variants might emerge with the coming of autumn and winter. However, the significant progress on vaccination suggests that in a lighter health emergency the economy will be more resilient than in the recent past. Meanwhile, economic policies remain supportive, be it either by lower interest rates and liquidity provision by the ECB, or by government stimulus. The recovery should gain momentum in 2022, boosted by the bigger impact of the EU funds, the recovery of tourism and the gradual release of suppressed consumption in the periods of heightened restraints and uncertainty.”

FocusEconomics Consensus Forecast panelists see GDP climbing 4.0% in 2021, which is up 0.1 percentage points from last month’s forecast. In 2022 the economy is seen growing 4.9%.

Author:, Junior Economist

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Portugal GDP Chart

Portugal GDP Q2  2021

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

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