Portugal’s GDP increased by 4.9% in 2021, highest growth since 1990

After falling by 8.4% in 2020, the country's GDP rebounded in 2021 with an increase of 4.9%.

After reporting an 8.4% drop in 2020, Portugal’s GDP has risen by 4.9% in 2021, the highest growth since 1990. This figure is above the 4.8% forecast by António Costa’s government in the State Budget for 2022 (OE 2022). The flash estimate for last year’s GDP was revealed this Monday by Statistics Portugal (INE).

“In 2021, GDP grew by 4.9%, in volume, the highest growth since 1990, following the historical decline of 8.4% in 2020, which resulted from the adverse effects of the COVID-19 pandemic on economic activity,” INE reveals, adding that “domestic demand presented a significant positive contribution to the annual rate of change of GDP, after being markedly negative in 2020, with a recovery of private consumption and investment.”

In addition, “the contribution of net external demand was significantly less negative in 2021”, with a pronounced growth in exports and imports of goods and services.

In the fourth quarter of 2021, the country’s GDP grew by 5.8% year-on-year and 1.6% quarter-on-quarter, according to the statistics office. This data was made public in the wake of the unexpected victory of the Socialist Party (PS) in yesterday’s snap elections.

INE also refers that this flash estimate “incorporates new primary information for the previous quarters, which implied revisions in some aggregates for the quarters of 2021,” namely in public consumption and investment. “Lastly, it was also used the most recent information on international trade in goods and, in particular, with a higher impact, in services for the year 2021.”