Contraction of Portuguese economy in 1st quarter is bigger than expected

6 June 2013

Portugal’s economy posted a contraction of 4.0 percent in the first quarter of 2013 against the same period of 2012 and of 0.4 percent against the last quarter of 2012, according to revised figures issued Wednesday in Lisbon by the National Statistics Institute (INE).

In its previous estimate, issued in May, INE pointed to Portugal’s Gross Domestic Product (GDP) contracting by 3.9 percent in the first quarter of the year.

According to INE, the highest year-on-year drop in GDP growth in Portugal was determined by domestic demand, particularly investment.

Domestic demand fell by 6.3 percent year on year, leading to a higher drop than in the previous quarter (-4.5 percent), and this result was mainly driven by reduced investment, which after falling 2.1 percent at the end of 2012 fell 16.8 percent in the first quarter of 2013.

The balance of trade posted a positive result in the first quarter of 1.4 percent of GDP, against -1.7 percent in the first quarter of 2012 and 0.4 percent in the final quarter of the year.

INE said that the economy lost 101,000 jobs between the end of 2012 and the first quarter of 2013, dragging employment to its lowest ever level and leading to the employed population to fall to 4.46 million people, or 2.2 percent less than in the final quarter of 2012. (macauhub)