Will Portugal continue growing? Composite leading indicators say yes, but…

  • ECO News
  • 8 August 2017

OECD's composite leading indicators point to a sable growth momentum in the next six to nine months in Portugal, without foreseeing any strong changes in the cycle. But there is a red flag.

OECD’s composite leading indicators continue pointing to a stable growth momentum in the next six to nine months in Portugal. This indicator, which aims to foresee turning points in an economic cycle, increased in June and continues standing above 100 points, the standard for growing economies. But there is one red flag, which requires caution.

In June, the OECD’s composite index accelerated to 100.7 points, evolving from the 100.03 points it had in May, shows data concerning Portugal.

The exact number says very little for this indicator: what matters is to see if it is above the 100 points threshold (which represents economic growth) and if it is growing, which would indicate an economic expansion phase. Therefore, Portugal is showing positive indicators: the number increased and stands above 100 points. When making a monthly comparison, there was a 0.03% increase.

Nonetheless, there is a red flag: when making an homologous comparison, the indicator decreased for the fifth consecutive month; in June, the contraction was of 0.31%. This homologous decrease could mean that a period of deceleration in economic growth is coming.

PUB