Portugal’s GDP with fifth largest year-on-year fall in the eurozone

The Portuguese economy fell 6.1% year-on-year in the fourth quarter. This was the eurozone’s fifth largest year-on-year fall, according to Eurostat data released on Tuesday, only surpassed by the contractions recorded by Malta (-6.2%), Greece (-7.9%), Spain (-9.1%) and Italy (-6.6%).

In year-on-year comparison, the Portuguese GDP performance was lower than that of the eurozone and the European Union, whose falls were 4.9% and 4.6%, respectively. Outside the eurozone, only Croatia (-7.1%) recorded a higher fall than Portugal at the end of last year.

However, in the quarterly comparison, Portugal is in the middle of the EU table, better than the 0.7% and 0.6% falls recorded by the average. The Portuguese economy performed on a par with Slovakia and similar to Germany (0.3%). At the extremes are Ireland, with a fall of 5.1% quarter-on-quarter in GDP, and Romania, with a growth of 4.8% quarter-on-quarter in GDP.

In the EU as a whole, the explanation for economic contraction in the fourth quarter is the fall in private consumption (-2.8%), which is caused by the greater restrictions applied in several European countries to control the pandemic. Investment continued to grow, as did exports, recovering for the second consecutive quarter.

For the full year, Portugal’s GDP shrank by 7.6%, while the European Union’s GDP and that of the eurozone decreased by 6.6% and 6.2%, respectively.