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%.
- 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.
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