Back in the black in annual terms

Page created: Friday, 13 February 2015 14:31 GMT

Economy   GDP  Growth  INE  Quarterly National Accounts

Portugal’s Gross Domestic Product registered annualised 0.7% growth in the fourth quarter and turned in annual growth of 0.9% according to the early indicator from the National Institute of Statistics on Friday.

Hence, the fourth quarter did represent a hiccup in the country’s return to economic vitality following the 1.1% annualised growth rate in the third quarter.

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The figure is generally in line with market expectations but falls below the forecasts factored into the government’s 2015 budget, based on 1% 2014 growth, but does match the October update to the European Commission’s own growth forecasts.

In turn, the national institute pointed to the dip in growth stemming from “a less positive contribution from internal demand in comparison with the third quarter and reflecting in a slow down in private consumption” and only partially offset by “the acceleration in the exports of goods and services.”

The GDP figure thus put on 0.5% in real terms, up from 0.3% in the third quarter due to this boost in international demand with the annual 0.9% increase in GDP reversing the 1.4% shrinkage seen in 2013.

Friday also saw João Luís Pacheco, Councillor to the Portuguese Communities in the United States, predict a pick up in the value of remittances returned to Portugal by emigrants following the drop in the value of the euro in recent months.

“With the dollar moving closer in value to the euro, logic says that this is an incentive for persons to send more money and even invest in Portugal”, said Pacheco.

The euro hit an 11 year low against the dollar in January following the announcement of an asset buying program from the European Central Bank and the National Bank of Switzerland opting to break the Swiss francs peg with the euro.