Portugal GDP


Portugal: GDP expands less than previously estimated in Q2

September 8, 2014

GDP expanded a seasonally-adjusted 0.3% over the previous quarter in Q2 after having contracted 0.5% in Q1 according to more detailed data published by Statistics Portugal on 8 September. The expansion in GDP was less than the 0.6% increase reported in the preliminary estimate. On an annual basis, the economy grew 0.9% in Q2, which was slightly down from the 1.0% rise tallied in Q1.

According to Statistics Portugal, the expansion tallied in Q2 was driven by an improvement in the external sector, whereas domestic demand deteriorated markedly. Private consumption fell 0.4%, which contrasted the 1.1% increase in Q1, and government consumption declined 0.1% (Q1: -0.5% quarter-on-quarter). Conversely, fixed investment expanded 3.0% after having contracted 4.1% in Q1.

The external sector’s net contribution to overall growth swung from minus 1.9 percentage points in Q1 to plus 0.8 percentage points in Q2, as exports of goods and services rose 1.6% over the previous quarter (Q1: -1.6% qoq). Conversely, imports contracted 0.3% (Q1: +3.1% qoq), which marked the lowest reading in over two years.

The Bank of Portugal expects the economy to expand 1.1% in 2014 and 1.5% in 2015. FocusEconomics Consensus Forecast panelists expect that GDP will expand 0.9% in 2014, which is down 0.1 percentage points from last month’s projection. For 2015, the panel expects economic growth to accelerate to 1.5%.

Author: Angela Bouzanis, Senior Economist

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Portugal GDP Chart

Portugal GDP Q2 2014 1

Note: Year-on-year and annual average variation in %.
Source: Statistics Portugal (INE) and FocusEconomics calculations.

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