Portugal: National accounts for Q3 confirm GDP growth as 2.9 pct QoQ, 4.2 pct YoY

Portugal’s gross domestic product swelled 2.9% in the third quarter and was 4.2% larger than in the same period in 2020, the National Statistics Institute (INE) confirmed in its Quarterly National Accounts, released on Tuesday.

“Gross Domestic Product (GDP) in real terms registered a year-on-year rate of change of 4.2% in the third quarter of 2021,” the release reads. “In the previous quarter, the year-on-year rate of change of GDP was 16.1%, due to the strong impact of the pandemic in the second quarter 2020.”

According to the institute, GDP growth in the third quarter of this year reflected the gradual easing of restrictions imposed by the pandemic, after two quarters with opposite results: the strong reduction of GDP in the first quarter (-3.3%), determined by the general lockdown, and an increase of 4.4% in the second quarter, marked by the gradual lifting of restrictions on mobility.

“The contribution of domestic demand to the year-on-year rate of change of GDP was positive [in the third quarter], but less intense than in the previous quarter, following the partial dissipation of the base effect,” it notes. “The contribution of net external demand remained negative in the third quarter, with an increase of Imports of Goods and Services slightly more pronounced than that of Exports of Goods and Services. 

“It should be noted that in the third quarter of 2021, both import and export deflators registered significant increases, largely influenced by the evolution of the prices of energy products and raw materials, extending the loss of terms of trade already observed in the previous quarter,” it adds.

“Compared to the second quarter of 2021, GDP increased 2.9% in volume, with a positive contribution of net external demand to the quarter-on-quarter rate of change of GDP (negative contribution in the second quarter) and a less intense positive contribution of domestic demand in the third quarter,” the release continues. “In the third quarter, GDP growth reflected the gradual decrease of the pandemic restrictions, after two quarters with opposite results: a strong GDP reduction in the first quarter (-3.3%), determined by the general confinement, and an increase of 4.4% in the second quarter following the lifting of restrictions on mobility.”

The figures now published confirm those put forward in the flash estimate published by INE on 29 October, which pointed to 2.9% quarter-on-quarter and 4.2% year-on-year growth in GDP.