The National Statistical Institute (INE) has brought forward to this Friday the release of the flash estimate of GDP for the second half of the year.
The Portuguese economy contracted 16.5% year-on-year in the second quarter of 2020, in which it has already been fully affected by the pandemic. Compared to the previous quarter, the drop was 14.1%. The data were released this Friday by the National Institute of Statistics (INE) in the flash estimate of GDP that was anticipated 15 days.
So far, the biggest GDP drop in a quarter, in year-on-year terms, had been recorded in the fourth quarter of 2012 when the economy contracted by 4.5%, according to the INE’s historical series.
“Reflecting the economic impact of the pandemic, the Portuguese Gross Domestic Product (GDP) registered a strong contraction in the second quarter of 2020, decreasing by 16.5% in volume, in year-on-year terms, after the reduction of 2.3% in the previous quarter,” the INE said.
This figure is explained by “the negative contribution of domestic demand to the year-on-year GDP rate of change, which was considerably more negative compared to the previous quarter, reflecting the significant contraction in private consumption and investment,” the statistics office explained. Another reason for this drop in Portugal’s GDP was the negative contribution of net external demand.
“The negative contribution of net external demand was more pronounced in the second quarter, as a result of the more intense reduction in Exports of Goods and Services than in Imports of Goods and Services, due largely to the non-residents tourism almost being interrupted,” The INE added.
In the quarter-on-quarter comparison, Portugal’s GDP fell by 14.1%, which compares with a fall of 3.8% in the previous quarter. INE says “this result is likewise explained, to a large extent, by the negative contribution of domestic demand to the quarter-on-quarter GDP rate of change, and also by a more negative contribution of net external demand.”
The INE reports that it will maintain the release of GDP on August 14, which in this case will be the second estimate, and on August 31 it will arrive detailed data on what happened in the Portuguese economy in the second quarter.