With the economy confined in the second half of March, the Portuguese GDP contracted 2.3% in the first quarter of this year, according to the National Statistics Institute (INE).
The Portuguese economy contracted 2.3% year-on-year in the first quarter of 2020, in which it was already partially affected by the pandemic. This figure is one-tenth below that revealed in the quick estimate (-2.4%). The data were released this Friday by the National Statistics Institute (INE).
“The contraction of the economic activity reflected the Covid-19 pandemic impact which, in the last month of the quarter, had already a significant impact,” explains the statistics office, noting that the chain contraction was 3.8% (-3.9% in the quick estimate). It should be remembered that the GDP had grown 2.2% year-on-year in the fourth quarter of 2019.
The INE justifies the downward revision with “the use of new data implied an upward revision of 0.1 percentage points in the previously released year-on-year and quarter-on-quarter rates of change, with an upwards revision in net exports of imports of goods and services in volume.” The trade balance turned out to be better than expected in the flash estimate.
Although the fall was smaller than previously estimated, it remains the largest year-on-year fall in GDP since the first quarter of 2013, when the economy contracted by 3.6%.
It should be noted that GVA contracted by 1.7% in the first quarter, reflecting a fall of 4.1% in the sector that combines the trade and repair of vehicles and accommodation and restaurants. Other service activities and industry also recorded significant declines. Construction slowed down, but maintained its positive contribution, as did the financial sector and agriculture.