GDP grows 2.8% in the second quarter, discloses INE

  • ECO News
  • 14 August 2017

Even so, the Portuguese economy continues growing above the Euro Area average. This rise has been happening for nine months now, which hadn't happen since 2001.

GDP had a 2.8% increase in the second quarter of 2017, when making a comparison with the same period of 2016. It had an identical rhythm to the first three quarters of the year, but confirms the nine months’ growth above the Euro Area. The Portuguese economy grew 0.2% when making a comparison to the first three months of 2017, which represents a decrease in the growth rhythm registered since the second semester of last year. These data were revealed this Monday by Statistics Portugal (INE), in a Flash Estimate (the final data will be disclosed on August 31).

According to INE, “net external demand registered a slight negative contribution to the year-on-year GDP growth rate”. Statistics Portugal further explain that exports decelerated more than imports, which harmed April to June’s GDP.

As for domestic demand, it maintained a strong “positive contribution”, which was “more intense than in the previous quarter, due to the acceleration of Investment”, is stated in INE’s press release.

When making a comparison to the previous quarter, GDP’s growth decelerated to 0.2%. This is the lowest percentage since the second quarter of 2016 and it represents a strong deceleration, when comparing to the 1% quarterly growth registered between January and March.

INE further discloses that “the contribution of net external demand was negative”, while “the contribution of domestic demand increased due to the Investment evolution”. In this case, both Changes in Inventories and GFCF gave a positive contribution, “although the latter was lower than the observed in the previous quarter”, states INE.

This means that this quarter’s GDP growth is equal to the first quarter’s GDP percentage, leveled with the 2007 GDP. This means that Portugal hadn’t had such a growth rhythm in 10 years and that the last time Portugal grew more than the Euro Area for nine months on a row was in 2001.