Portugal: GDP expands again in Q3
December 9, 2013
GDP expanded a seasonally-adjusted 0.2% over the previous quarter in Q3 according to detailed data published by Statistics Portugal on 9 December. The increase was on par with the preliminary estimate, although it was below the 1.1% increase seen in Q2, which had represented the strongest expansion since Q1 2007. On an annual basis, the economy declined 1.0% in Q3, which represented an improvement over the 2.0% drop recorded in the previous quarter.
According to Statistics Portugal, the Q3 expansion reflects a strong improvement in domestic demand. Private consumption expanded 1.2% over the previous quarter (Q2: +0.5% quarter-on-quarter), marking the fastest acceleration since Q4 2009. Government spending declined 0.3% in Q3 (Q2: +0.1% qoq), due to a series of austerity measures aimed at trimming down the fiscal deficit. Gross fixed investment improved from a 0.3% increase in Q2 to a 1.5% expansion in Q3.
In contrast, the external sector's net contribution to overall growth deteriorated, falling from plus 0.7 percentage points in Q2 to minus 1.1 percentage points in Q3. Exports of goods and services fell 0.3% over the previous quarter (Q2: +5.3% qoq), while imports expanded 2.6% (Q2: +3.6% qoq).
The Bank of Portugal expects the economy to expand 0.3% in 2014, after a 1.6% contraction expected for this year. The government is more upbeat than the Central Bank regarding 2014 and expects the economy to grow 0.8%, following a projected contraction of 1.8% in 2013. FocusEconomics Consensus Forecast panelists expect that GDP will contract 1.8% in 2013, which is up 0.1 percentage points from last month's projection. For 2014, the panel expects GDP to expand 0.5%, which is also up 0.1 percentage points over the previous month's estimate.