Portugal: Government hails growth as ‘most sustainable ever’ as investment jumps

Portugal’s government on Friday hailed the country’s economic growth in the first quarter was the “most sustainable since 1995”, with investment showing its largest increase since records began and exports also at a high.

The Ministry of Finance released the statement in the wake of the publication by the National Statistics Institute (INE) of the national accounts for the first three months of the year, which showed that gross domestic product grew 0.5% in the quarter and was 1.8% larger than the first quarter of 2018. In the fourth quarter of 2018 year-on-year growth had been 1.7%.

“The weight of investment and exports in GDP has reached 68% for the first time,” said the ministry. “This is thus is the most sustainable Portuguese economic growth since 1995.”

The growth in GDP, it stressed, had “accelerated from the end of 2018 driven by investment and exports”.

The statement notes in particular “the remarkable acceleration of investment, with an annual rate of variation of 17.8% (7.4% in the previous quarter), the most significant progression since 1995”, when the INE began calculating this statistical series.

Also, the ministry said, “the value of investment is the highest since 2010 in real terms”, with increases seen across the board.

In machinery and equipment (other than transportation) and in intellectual property, investment is at its highest level ever, it noted, arguing that “the composition of investment reveals a potential for a future very favourable impact on the Portuguese economy.”

The ministry also noted exports growth picking up again, with the total volume in the quarter up 3.4% on a year earlier.

It also highlighted “the highest volume of employment since 2010, with 4,966,900 people employed” in the quarter. Adjusted for seasonal factors, employment in the first quarter was up 1.5% from a year earlier, with a net 70,000 more people in work.

“This is a very positive development, associated with the marked reduction of unemployment that has been seen, and which brought the unemployment rate [down] to 6.8% in the first quarter of the year”, the ministry stresses.

It also stressed the “important contribution of domestic demand”, which in the first quarter was up 4.7% on the year – “the most significant progression of this century”.