GDP decelerates to 2.5%. Consumption helped the most

The Portuguese economy grew 2.5% in the third quarter of this year, according to the flash estimate from Statistics Portugal (INE), published this Tuesday.

According to INE, internal demand gave a larger contribution to the third quarter growth. Private consumption accelerated, while investment slowed down. As for net external demand, there was a negative contribution, unlike what was registered in the previous quarter. The Portuguese entity for statistics also discloses that this contribution was negative because exports of goods and services decelerated, while imports grew faster.

In comparison to the previous quarter, this growth confirms the expected homologous decrease: between April and June, the economy grew 3%. The decrease in the homologous growth represents an interruption of the period in which Portugal grew at a higher rate than the European Union and Euro Area. According to what was shown this Tuesday by Eurostat, the community partners also grew 2.5%.

However, when regarding the quarter-on-quarter growth, which is seasonally adjusted and, therefore, is comparable, the third quarter represented an acceleration in comparison to the second. The flash estimate points to a 0.5% growth, meaning an extra 0.2 percentage points than in the second quarter of the year.

The contributions also behaved differently when the comparison is made between quarters. In comparison to the period between April and June, the contribution of external demand went from negative to positive, with a higher increase in exports of goods and services than in imports. The contribution of internal demand decreased slightly because of the reduction of investment and the increase in private consumption.

These data mean the most recent goal set by the Government is closer to being achieved — 2.6%, inscribed in the 2018 State Budget draft.