Portugal: Economy contracts 2 pct in 4th quarter and ends 2008 in recession

16 February 2009

Lisbon, Portugal, 16 Feb – The Portuguese economy’s growth contracted 2 percent in the fourth quarter of 2008, as compared to the previous three months, for the second quarter in a row, according to figures published in Lisbon by the National Statistics Institute (INE), ending the year in technical recession.

The summarise estimate from INE issued Friday showed that overall Portugal’s gross domestic product (GDP) saw zero growth – stagnation – after a rise of 1.9 percent in 2007.

This annual rate of growth was the lowest for five years, since the 2003 recession.

Against the previous month, GDP contracted 2 percent in the fourth quarter after a fall of 0.1 percent in the third quarter. The economy thus contracted for two consecutive quarters, putting the country in technical recession.

Year on year GDP growth fell by 2.1 percent, which compares with a rise of 0.5 percent in the third quarter.

Domestic demand (consumption and investment) fell in the fourth quarter, INE said, noting the “particular intensity” of the negative contribution of investment, as well as net foreign demand (exports minus imports).

Exports saw an “expressive reduction,” INE noted. (macauhub)