Portugal’s GDP growth is growing,
2022.11.30 11:19
Portugal’s GDP growth is growing,
Budrigannews.com – Despite inflation reaching three-decade highs, Portugal’s economy expanded by 0.4% in the third quarter, up from 0.1% in the previous quarter. However, official data on Wednesday revealed that exports and investment are now faltering.
The National Institute of Statistics (INE) confirmed its flash estimates from a month ago in its second reading of gross domestic product. These estimates included a growth of 4.9% year-over-year, down from 7.4% in the second quarter.
According to INE, net external demand was zero in the second quarter, while the quarter-on-quarter contribution of domestic demand to GDP “turned positive” to 0.4 percentage points, up from 0.5 percentage points in the previous quarter.
Spending on durable goods contributed to a 1.1% increase in private consumption between July and September, compared to a 0.7% increase over the previous three months.
However, despite services exports, which include the crucial tourism sector’s recovery to pre-pandemic levels, rising 2.8% compared to 0.8% in the second quarter, exports only increased by 1.2% in the third quarter, down from 2.9% in the previous quarter.
While the construction industry continued to contract, investment fell 1.7 percent, less than the 2.7% decline in the April-June time frame.
According to Filipe Garcia, an economist at the Informacao de Mercados Financeiros consultancy, “The numbers confirm that the economy will slow down, although it is not very visible yet due to private consumption remaining strong despite high inflation.”
He went on to say, “There are already some worrying signs for the behavior of the economy in 2023, such as the slowdown in exports and the continued fall in investment, in particular the contraction in the construction sector.” These indicators include the slowdown in exports.
Consumer prices in Portugal increased by 9.9% in November, a slight decrease from the 10.1% increase in October, which was the fastest increase in 30 years.
Two weeks ago, Finance Minister Fernando Medina told Reuters that the government expected economic growth to exceed its previous forecast of 6.5 percent this year and reach at least 6.7 percent.
However, Medina anticipated a sharp slowdown in growth to 1.3% in 2023.
