GDP exceeds expectations and grows 1.4% in 2016

  • ECO News
  • 14 February 2017

INE disclosed this Tuesday that GDP grew 1.4% in 2016 - internal demand gave it a boost. Concerning the last three months of 2016, there was 1.9% homologous growth.

The INE (Statistics Portugal) disclosed this Tuesday, in their flash estimate, that GDP grew 1.4% in 2016. This percentage highly exceeds economists’ expectations, who pointed to a 1.3% increase, but also the Government’s expectations, who had set the goal of 1.2%.

Even so, this growth represents a decline when compared to the 1.6% in 2015. The INE explains that “the contribution of domestic demand to GDP growth decreased, reflecting the reduction in Investment, and, to a lesser extent, the deceleration of private consumption”. As a consequence, “net external demand recorded a significantly less negative contribution than in 2015”, the office highlights.

This year-on-year growth was achieved through a more positive evolution in the second semester, more than in the first. Alike the percentage of the third quarter, the values of the last months of 2016 were a pleasant surprise, reinforcing growth.

During the last quarter of 2016, the homologous growth was 1.9%, accelerating when compared to the third quarter – 1.6%. That percentage was larger than the European average (1.7%), as well as the European Union average, of 1.8%, shows the data also disclosed this Tuesday by Eurostat.

Since private consumption gave a boost to the economy this quarter, the INE explains that imports accelerated, which made the contribution of net external demand “negative”, as opposed to the third quarter.

Also in their quarterly accounts, it is possible to ascertain there was a larger contribution of internal demand in the last months of the year than in the period of July to September. But the power came from investment, instead of consumption: “Contrary to the previous quarter, the contribution of domestic demand was positive, mainly driven by Investment behavior”, is stated by INE.