Increase in exports and investment explain 2.8% GDP in the first quarter of 2017

In the first quarter of 2017, the Portuguese economy had a 2.8% homologous growth. After their quick estimate on May 15, Statistics Portugal (INE) disclosed the Quarterly National Accounts, where it is confirmed that GDP increased 2.8% in the first three months of 2017. The evolution of exports and investment, in comparison to the first quarter of 2016, justifies this increase.

Behind this result is the evolution of exports of goods and services, higher than imports of goods and services. The homologous exports variation rate is set at 9.7%, the largest increase since the fourth quarter of 2013. Services increased 10.9% and goods increased 9.2%. As for imports, they increased 8%, also with a large growth in services (10.4%) and less growth in goods (7.7%). Besides, Statistics Portugal disclose that in the “1^st quarter 2017, there were more intense losses in the terms of trade compared to the previous quarter”.

This recorded value made net external demand go from a negative contribution (-0.6 percentage points) to a positive contribution of 0.5 percentage points in GDP’s homologous variation. “The more intense year-on-year growth of GDP in the first quarter 2017 was driven by the increase of net external demand contribution, since domestic demand presented a lower contribution to GDP change rate than in the previous quarter”, explains INE in the press release disclosed this Wednesday.

On the contrary, the contribution of internal demand decreased in comparison to the fourth quarter. “Domestic demand slowdown reflected the behaviour of private consumption”, states INE. As for public consumption, it made a negative contribution to the year on year domestic demand change rate. By contrast, there was an acceleration in investment which went from a 3.6% growth in the fourth quarter to 5.5% in the first quarter of 2017.