Portugal GDP Growth Confirmed at 0.4% in Q2

The Portuguese economy expanded 0.4 percent on quarter in the three months to June, the same as in the last two quarters and matching preliminary estimates. Domestic demand was the main driver of growth while net external demand dragged the expansion down, final figures showed.

It was the fifth straight quarter of expansion and it was mainly supported by a rise in domestic demand (+0.8 percent against +1.6 percent in Q1). Final consumption expenditure advanced at a faster pace (+1.2 percent against +0.6 percent in Q1), mainly due to higher households spending (+1.3 percent against +0.8 percent in Q1) and stronger government consumption (+0.7 percent against +0.2 percent in Q1). By contrast, gross capital investment contracted by 1.2 percent (+7.1 percent in Q1), as fixed investment fell 2.4 percent (+3.9 percent in Q1) and construction declined 5.3 percent (+7.1 percent in Q1). Net external demand contributed negatively to the expansion, as imports of goods and services expanded 4.5 percent (+2.5 percent in Q1) while exports increased at a slower 3.9 percent (-0.4 percent in Q1).

Total employment expanded 1.3 percent, following a 0.7 percent growth in the precedent quarter.

Year-on-year, the economy advanced 1.5 percent, the same pace as in previous quarter. Final consumption expenditure grew 2.7 percent, as households spending expanded by 3.4 percent (+2.5 percent in Q1) and public expenditure increased by 0.5 percent (-0.4 percent in Q1). Fixed investment grew 3.9 percent (+9.5 percent in Q1), contributing to a 7 percent expansion of gross capital formation (+1.7 percent in Q1). Exports increased by 7.8 percent (+6.6 percent in Q1) and imports went up 12.3 percent (+7.1 percent in Q1). As a result, net exernal demand registered a significant negative contribution to the economy's growth.

Portugal GDP Growth Confirmed at 0.4% in Q2

INE | joana.ferreira@tradingeconomics.com
8/31/2015 12:30:28 PM