Lisbon, Portugal street

Portugal GDP Q1 2024

Portugal: GDP growth records quickest upturn in one year in Q1

According to a preliminary estimate, the economy expanded 0.8% on a seasonally adjusted quarter-on-quarter basis in the first quarter, up from the downwardly revised 0.7% in Q4 2023. Q1’s reading marked the strongest upturn since Q1 2023 and beat market expectations.

On an annual basis, economic growth cooled markedly to 1.4% in Q1 (Q4 2023: +2.1% yoy) and marked the slowest increase since Q1 2021. That said, Portugal still placed among the best-performing countries in the Euro area in both annual and sequential terms.

According to the statistical office, Portugal’s quarterly upturn largely reflected a positive contribution of the external sector, which had detracted from GDP in the prior quarter; imports of goods and services in Q1 contracted at a faster quarterly clip than exports. Adding further support to growth, private spending accelerated in the quarter. In contrast, fixed investment deteriorated from Q4, limiting the overall result.

A complete breakdown will be released on 31 May.

Our panelists see sequential growth slowing in Q2, and the economy losing momentum in 2024 as a whole from 2023. Looser fiscal policy and faster fixed investment growth—underpinned by EU funds inflows—will fail to outweigh weaker increases in exports and private spending. That said, economic activity will still outpace the Euro area average in 2024.

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