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Macroeconomic outlook report: Portugal

Second quarter of 2018

During the second quarter of 2018, Portugal's GDP experienced an acceleration of 0.22 p.p., reaching a year-over-year growth rate of 2.40%, mainly due to the behavior of internal demand. In terms of the labor market, the unemployment rate decreased over the previous quarter to 7%, while the y/y growth of employment decelerated from 1Q18 to a 2.16% rate. The euro appreciated against the dollar, registering an average exchange rate of 1.18 $/€. Lastly, inflation stood at 0.99%.

Macroeconomic overview

    • During the second quarter of the year, the Portuguese economy accelerated compared to the previous quarter by 0.22 p.p. reaching a rate of 2.40%. This performance was explained mostly by the behavior of the dometic demand, which registered an acceleration of 0.10 p.p. compared to previous quarter, up to 2.60%, boosted by the acceleration in the year-over-year growth of private consumption as well as public expenditure. The deceleration of gross capital formation didn’t interrupt the general growth of domestic demand.
    • On the other hand, the year-over-year growth rate of exports backed up the acceleration in Portuguese GDP, accelerating its year-over-year growth in 2.10 p.p., reaching 7% while imports accelerated in a slower way, by 1.60 p.p., reaching 7.20%.
    • In the labor market, the unemployment rate decreased by 0.67 p.p., registering a 7% rate, while the y/y growth rate of employment decreased in 0.96 p.p. compared to the first quarter of the year, to 2.16%.
    • The euro depreciated against the US dollar by 0.05 dollars per euro compared to the previous quarter, registering an average exchange rate of 1.18 $/€. This depreciation was mainly due to a tightening of monetary policy by the Federal Reserve and improved forecasts for the US economy.
    • Inflation stood at 0.99% in the second quarter of 2018, 0.22 p.p. above the rate recorded in the previous quarter, as a result of the increase in food, drinks, tobacco, cloths, housing, oil and transport prices.

    For more information access the executive document in pdf (avalaible in Spanish and Portuguese).

    © GMS Management Solutions, S.L., 2019. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.