Lisbon, Portugal street

Portugal GDP Q2 2023

Portugal: GDP records null growth in the second quarter

GDP was flat on a seasonally adjusted quarter-on-quarter basis in the second quarter, below the 1.6% expansion logged in the first quarter. Q2’s reading marked the worst result since Q1 2021.

Private consumption increased 0.6% in the second quarter, which was above the first quarter’s 0.2% expansion. Public consumption bounced back, growing 0.4% in Q2 (Q1: -0.3% s.a. qoq). Fixed investment contracted 1.6% in Q2, marking the worst result since Q2 2022 (Q1: -0.5% s.a. qoq).

Exports of goods and services fell 2.3% on a seasonally adjusted quarterly basis in the second quarter, which contrasted the first quarter’s 6.1% expansion. In addition, imports of goods and services deteriorated, contracting 1.6% in Q2 (Q1: +1.0% s.a. qoq), marking the worst reading since Q2 2020.

On an annual basis, economic growth slowed to 2.3% in Q2, from the previous period’s 2.5% growth. Q2’s reading marked the worst since Q1 2021.

Looking at H2, activity is set to remain subdued as depleted savings and above-target inflation constrain private spending, while tighter financing conditions weigh on investment. Key factors to monitor are the summer tourism season and the pace of the execution of investment projects related to EU recovery funds.

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