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Portuguese economy grows 0.2%, falling short of estimates

Portuguese economy grows 0.2%, falling short of estimates

LISBON: Portugal’s economic growth decelerated more than forecast in the three months through June, expanding at the slowest pace in a year.

Gross domestic product rose 0.2 percent from the first quarter, when it expanded 1 percent, the Lisbon-based National Statistics Institute said in a preliminary report on Monday. That fell short of the 0.6 percent increase predicted by economics in a Bloomberg survey. From a year earlier the economy expanded 2.8 percent, matching the previous quarter.

The government continues to expect “strong” economic growth going forward as the labor market shows signs of robustness, Finance Minister Mario Centeno said in telephone interview. The slowdown in the second quarter is related to an increase in imports of machinery and equipment and that’s a positive sign for investment, he said.

Tourism and exports have been boosting the economy, with the Bank of Portugal forecasting growth will accelerate to 2.5 percent this year. That growth is helping the country’s minority Socialist government manage the budget deficit. Last year, it was the narrowest as a percentage of GDP in four decades, according to Prime Minister Antonio Costa.

Final numbers, including a detailed breakdown on GDP contributors, are due Aug. 31.