Portugal: GDP plummets in Q4
March 9, 2012
In the fourth quarter, GDP plunged a seasonally adjusted 1.3% over the previous quarter, according to the National Statistics Office (INE, Instituto Nacional de Estadistica). The reading confirmed the 14 February flash estimate and more than doubled the 0.6% contraction seen in the third quarter. On an annual basis, the economy declined 2.8% over the same quarter the year before (flash estimate: -2.7% year-on-year). The fourth quarter contraction was due to a marked deterioration in the domestic sector, as the external side of the economy improved over the previous period. Total consumption declined a sharp 2.5% over the previous quarter (Q3: -0.6% quarter-on-quarter), dragged down by plummeting private consumption (-3.2% qoq). Government consumption, on the other hand improved from a 2.2% fall in Q3 to a 0.6% decline. In addition, gross fixed investment plunged 13.8% over the previous quarter (Q3: -1.5% qoq). The external sector improved, as imports deteriorated at a sharper pace than exports. Shipments of goods and services contracted 1.8% over the previous quarter (Q3: +2.9% qoq), while imports swung from a 2.3% expansion in the third quarter to a 9.7% drop in the fourth. As a result, the external sector's net contribution to overall economic growth jumped from 0.1 percentage points in the third quarter to 3.3 percentage points in the fourth. For the full year 2011, GDP contracted 1.6%, contrasting the 1.4% expansion recorded in 2010. The government expects the economy to contract 3.3% this year. The government sees the economy contracting 3.3% this year, while the Central Bank similarly anticipates GDP to decline 3.4% (recently revised from a previous 3.1% contraction). For 2013, the Bank anticipates the Portuguese economy will experience no growth.