The Portuguese economy continued its recovery path from the pandemic crisis over the past summer, and this recovery was stronger than economists had expected. This is the summary of the rapid estimate of the development of national accounts in the third quarter of this year, which was published on Friday by the National Institute of Statistics (INE).
According to the National Statistics Authority, GDP grew by 4.2% on an annual basis, that is, compared to the same period in 2020, and 2.9% in the same period, that is, in relation to the past three months.
The median forecast of economists compiled by Expresso this Thursday indicated third-quarter GDP growth of 3.6% year-on-year and 2.2% in the same period. The numbers turned out to be very conservative compared to the official data published by the National Institute of Statistics on Friday.
This growth for the Portuguese economy in the third quarter was far from the numbers recorded in the previous three months, when GDP rose 16.1% year-on-year. However, the National Institute of Statistics draws attention that this strong advance in GDP in the second quarter of this year was “influenced, to a large extent, by the strong impact of the epidemic in the second quarter of 2020”. It should be noted that at that time, as a result of the country’s first general confinement to halt the Covid-19 epidemic, the Portuguese economy experienced an unprecedented disruption of 17.9%.
What explains the GDP growth in the third quarter? INE is still not providing details, which are only supposed to be released at the end of November, but they are already leaving clues.
Thus, in analyzing the annual change in GDP in the third quarter, the National Statistics Institute highlights that the partial dissipation of the primary effect associated with the strong fall of the Portuguese economy in the spring of 2020 – due to the first general restriction of the country. – “Translates to the contribution of domestic demand growth to the annual change in GDP being less than that calculated in the previous quarter.”
Meanwhile, “the contribution of net external demand was slightly negative in the third quarter, reflecting a stronger increase in imports of goods and services compared to exports of goods and services.”
Regarding the contribution of the external front to the development of the Portuguese economy, the National Institute of Statistics draws attention that “in the third quarter of 2021, the deflator of exports and, to a greater extent, the deflator of imports will have registered a significant growth, mainly related to the evolution of prices for energy products and raw materials.” As a result, “the loss in terms of trade observed in the previous quarter was prolonged,” penalizing the Portuguese economy.
Analyzing the evolution of GDP in the series, i.e. in relation to the past three months, the INE highlights that there is a “positive contribution from net external demand”. That’s when this contribution was negative in the second quarter. It also notes “a less intense positive contribution from domestic demand in the third quarter of 2021.”
The National Statistics Authority draws attention that the GDP series growth in the third quarter “reflects the gradual reduction of restrictions imposed by the epidemic, after the increase in the frequency of vaccination against Covid-19, after two counterproductive quarters: the strong GDP reduction in the first quarter (-3.3%). ), defined by the general blockade, and an increase of 4.4% in the second quarter, which was marked by the gradual lifting of restrictions on movement.
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