Portugal’s economy slows to 0.2% growth in third quarter

Portugal’s economy grew 0.2% in the third quarter from the previous three months and 2.4% from a year earlier, according to data released on Friday by the national statistics office INE, pointing to a slowdown in momentum in a country closely watched for its broader growth outlook.

Both readings were weaker than in the second quarter, when GDP rose 0.9% quarter on quarter and 2.6% year on year. INE said the quarterly result reflected a slightly negative contribution from net external demand, with exports of goods and services falling more sharply than imports.

Domestic demand remained positive, although private consumption grew less strongly, while investment increased after declining in the previous quarter. On an annual basis, INE said the contribution from domestic demand fell, reflecting slower investment and final consumption spending, while net external demand was less negative because imports slowed more sharply than exports.

The flash estimate was in line with the range forecast by economists consulted by ECO, who had expected quarterly growth of between 0.1% and 0.3% and annual growth of between 2.2% and 2.5%. More detailed data on the contribution of each GDP component will be released on November 30.

For the full year, the Portuguese government expects GDP growth of 2.3%, matching the Banco de Portugal forecast. Other institutions project growth of 2.2% from the Public Finance Council, 2.1% from the IMF, 1.8% from the OECD and 1.7% from the European Commission.

Originally published at Eco.pt