Portugal: Economy rebounds in Q4
According to a preliminary reading, GDP bounced back in the fourth quarter, expanding 0.8% on a seasonally adjusted quarter-on-quarter basis, compared with the 0.2% contraction tallied in the third quarter. Q4’s reading marked the best result since Q1. On an annual basis, economic growth improved to 2.2% in Q4 from the previous period’s 1.9%.
According to the accompanying press release, domestic demand made a stronger positive contribution to the qoq expansion than in the previous quarter, while the contribution of the external sector was less negative.
The economy should lose momentum this year from last. Cooling services exports—amid a stabilization of tourist numbers—will restrain growth, and household spending will expand at a softer annual clip on tight monetary policy. That said, EU-funded investment should support activity. Higher price pressures due to supply disruptions in the Panama Canal and Red Sea are a downside risk.