During the first quarter of 2021, the Portuguese economy recorded a slight recovery (+0.64 p.p.) after the previous quarter's decline, with GDP registering a year-on-year rate of change of -5.44%. Regarding the labor market, the unemployment rate decreased down to 6.77%, while the y/y employment variation rate decreased compared to the previous quarter down to -1.32%. The euro appreciated against the dollar, and the exchange rate stood at 1.21 $/€. Finally, inflation stood at 0.43% after increasing compared to the previous quarter.

Macroeconomic outlook report: Portugal 1Q21

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Macroeconomic overview

    • During the first quarter of the year, the portuguese economy recovered slightly from the previous quarter, increasing by 0.64 p.p. the year-on-year rate of GDP to -5.44%. The stagnation of the economic recovery in this period was mainly due to the worsening health situation, which led to a tightening of containment efforts.
    • Regarding the labor market, Portugal's unemployment rate stood at 6.77% in 1Q21, after decreasing by 0.47 p.p. compared to the previous quarter. As for the employment growth rate, it registered a y/y variation rate of -1.32%, decreasing by 0.16 p.p. compared to 4Q20.
    • During the first quarter of 2021, the euro appreciated against the dollar compared to the previous quarter, recording an average exchange rate of 1.21 $/€.
    • Inflation in Portugal increased by 0.61 p.p. in the first quarter of 2021, up to a rate of 0.43%.

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