Portuguese Economy Stalls in Q3

The Portuguese economy showed no growth in the three months to September, compared to an upwardly revised 0.5 percent growth in the previous quarter and staying way below market expectations of 0.4 percent growth. While domestic demand contracted mainly due to a reduction of investment, net external demand contributed positively to the growth, preliminary estimates showed.

Portuguese economic growth stalled in the third quarter of 2015 after five straight periods of expansion as domestic demand, which had been the main driver of expansion, contracted. However, net external demand expanded, as imports of goods and services decreased at a faster pace than exports.

Year-on-year, the GDP advanced 1.4 percent, slowing from an upwardly revised 1.6 percent growth in the previous period, reflecting the deceleration of investment and, to a lesser extent, private consumption. Net external demand continued to hold back the economy.

Banco de Portugal is forecasting a full year 1.7 percent growth, accelerating to 1.9 percent and 2 percent in 2016 and 2017, respectively, as domestic demand is expected to be the main driver of expansion.

Portuguese Economy Stalls in Q3

INE | Joana Ferreira | joana.ferreira@tradingeconomics.com
11/13/2015 10:28:54 AM