Portuguese economy contracts by 3.3 pct in second quarter

15 August 2012

Portugal’s economy contracted by 3.3 percent in the second quarter of this year due to lower internal demand, which is the biggest contraction since the second quarter of 2009, the National Statistics Institute (INE) said Tuesday in Lisbon.

Figures from INE for the second quarter of 2012 point to a contraction of 1.2 percent of the country’s gross domestic product (GDP) against the previous quarter.

INE’s estimates show that the “sharper drop in GDP was determined by the behaviour of internal demand, which had a more negative effect than seen in the first quarter of 2012, notably in investment.”

Portugal’s GDP has been on the downturn for the last six months, since the first quarter of 2011.

The latest estimates from the three-way commission supervising Portugal’s financial bailout – made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund – point to the Portuguese economy contracting by 3 percent this year.

In European terms, the contraction in Portugal’s GDP was only exceeded by that of Greece, whose economy saw a contraction of 6.2 percent according to preliminary figures. (macauhub)