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Portugal Q2 growth revised higher, best in decade

Portugal Q2 growth revised higher, best in decade

LISBON: Portugal’s economy grew at its strongest pace in a decade in the second quarter, when it expanded 2.9 percent from a year earlier driven by growing investment, in a slight acceleration from 2.8 percent in the previous quarter, data showed on Thursday.

In its second reading of gross domestic product for the period, the National Statistics Institute revised both year-on-year and quarter-on-quarter growth upward by 0.1 percentage points from its flash estimate.

Compared to the first quarter, GDP increased 0.3 percent in a slowdown from 1 percent growth registered in January-March.

Investment rose 9.3 percent year-on-year, outpacing 7.7 percent growth in the first quarter and driving domestic demand 2.7 percent higher after 2.6 percent in the preceding three months. Domestic demand accounted for practically all of GDP growth.

Exports rose 8.2 percent, slowing down from 9.5 percent in the first quarter, but still exceeding imports growth of 7.5 percent. Net external demand contributed just 0.1 percentage points to GDP growth.

In quarter-on-quarter comparison, net external demand had a negative contribution of 0.4 percentage points as exports slipped 0.2 percent and imports grew 0.7 percent.

The economy grew 1.4 percent last year in a slight deceleration from 2015, but now the government expects an expansion of over 2 percent this year, which would help the country’s plan to slash the budget deficit further to 1.5 percent of GDP from 2 percent in 2016.