Economy shows signs of recovery in August

The Portuguese economy once again showed signs of recovery in August, with the activity indicator calculated by the National Statistics Institute (INE) accelerating for the second consecutive month. Also in trade and financial relations with abroad, there were positive news. According to data published this Thursday by the Bank of Portugal, the current and capital account balance entered positive territory for the first time this year, but the comparison with the previous year remains unfavourable.

“The indicator of economic activity increased slightly in August, similarly to what was observed in the previous month”, says INE in the Economic Synthesis of Conjuncture published this Thursday. In the month under review, this indicator – which serves to measure the trend of evolution of the Portuguese economy – showed an increase of 1.9% compared to the same month last year. This register means an acceleration compared to the previous month, when it rose 1.8%.

Despite these signs, the qualitative indicators for September are not as favourable. “The indicator of economic climate, available until September, has decreased, after having stabilized the previous month,” states the INE. This indicator measures the confidence of entrepreneurs, in other words, it gives a perception of expectations on the supply side.

This Thursday, Bank of Portugal also published relevant data for the Portuguese economy. The institution reveals that, “until August 2019, the combined current and capital account balance stood at 685 million euros”. This means that for the first time this year the external balance shows a positive value – until July Portugal had a deficit of 1633 million euros, which translated into an increase of 165% compared to the same period of the previous year. However, the position of this balance continues to be worse than a year earlier.