The Portuguese economy not only accelerated in the second quarter as it suffered a further slowdown in growth. According to the advanced flash estimate by the INE, the Portuguese domestic product (GDP) grew in jail, 0.2% in the second quarter of this year, an amount equal to the previous two quarters and keeping the divergence with the euro area.
in annual terms, the rise in GDP was 0.8%, against an increase of 0.9% in the previous quarter. We have to go back to the last quarter of 2014 to be able to find a value below. According to INE, which will give more details later this month, net external demand (between exports and imports) made a positive contribution, but private consumption did not give a new impetus, and investment is slow to start.
“the positive contribution of domestic demand to the annual GDP growth decreased significantly, observing a less intense growth of private consumption and a more significant reduction of investment”, signaled the INE. Net external demand, also says “now has a slightly positive contribution, reflecting the sharpest deceleration of imports of goods and services compared to exports of goods and services”.
Before It Breaks the official figures (which may be revised later this month) an average estimate of analysts contacted by Lusa pointed to a 0.4% growth in chain and 1% year on year.
Paula Carvalho, chief economist of the department of economic studies of the BPI, said that data released by INE “are lower than expected,” noting that the economy “slowed again in the second quarter of the year.” This when it expected a “slight acceleration due to the fading of some one-off effects [extraordinary] that negatively affected the first three months of the year (the closure of a refinery and the increase in durable goods imports thanks to anticipation of worsening taxation from April).
Asked about what is blocking an acceleration of economic growth, said the investment “is one of the main factors, reflecting weak outlook for demand from the entrepreneurs.” But stresses at the same time exports “continue with a poor performance” and “private consumption slowed.” The latter, he says, is positive, “given the historically low levels of household savings,” but it has a negative impact on growth.
The Finance Ministry, in a statement, did not fail to admit that the economy is “taking longer to accelerate the pace of growth” and that evolution is “lower than that underlies” the budget for this year, but argues that there are positive indicators.
” in the coming months, economic growth should be sustained in the signs of clear recovery of the labor market, “argues the ministry tutored by Mário Centeno, referring to data released this week and give descent account the unemployment rate to 10, 8%.
the employment, says the Government, “is also recovering” and it argues, is “an indicator of business confidence in the economy,” stressing that “investment expectations in 2016, released by INE, are the highest since 2007. “
divergent views
in the second half, believe the Finance, the investment scenario will be” enhanced by full implementation of Portugal 2020 [ Community funds]. ” Here, there are clearly divergent views with the Government to invest in a growth of 4.9% investment when the latest data from the Bank of Portugal point to a residual increase of 0.1%.
divergent views also have the two opposition parties, which marked press conference to comment on the INE data. The PSD, who spoke was the former Finance Minister Maria Luis Albuquerque, arguing that the numbers are “frankly negative” and shows that the “economy is stagnant.” For the vice president of Passos Coelho, “the Government has had a performance that is reckless, and” has followed the wrong economic strategy. ” He added that, in periods of weak economic growth, austerity is the next step, by following the “lack of capacity to meet our needs.”
On the CDS said Pedro Mota Soares, also a former minister of the previous government. “The goals that the Government had for this year are further and the difficulties that the Portuguese may well have are closer and this for us is not good news,” he said, quoted by Lusa.
for the Government, the Finance stressed that the data from the budget execution so far, particularly on the expenditure side, maintain the idea that the annual target, the general government deficit will be maintained. Even with a downward revision of growth, as has been admitted to the PUBLIC by the Minister of Finance, but without advance values (the original estimate was 1.8%).
In the case of BPI, its forecast to 1.3%, but Paula Carvalho says that there is now a risk of downward revision. “We await the publication of more detailed report of the INE. Tendentiously, the economy seems to be evolving around 1%, “he said.
At the level of the deficit, the European Commission now requires it to come down to 2.5% of GDP, when the Government pointed to 2.2%. Now entered the Brussels value (which still does not believe that this goes beyond 2.7% without additional measures by Portugal). Here, the government had a hand of the President. “I still think it’s possible the 2.5% deficit this year,” said Marcelo Rebelo de Sousa.
France and Italy stagnate
Looking to Europe, growth GDP chain in the euro area cooled in the second quarter and was 0.3% in the euro area and 0.4% in the EU (against 0.6% and 0.5% in the previous quarter, respectively).
on an annual basis, according to Eurostat, the European statistical agency, the rise in the euro area was 1.6% and 1.8% in the EU (against the previous 1.7% and 1 8%, respectively). However, although the average point to growth, there were cases where this did not happen, with France and Italy (two of the main European economies) to attend a stagnation (0%) of GDP in jail.
Since Germany rose 0.4% (several analysts predicted a more negative scenario) and Spain, the main client partner of Portuguese exports, saw the economy up 0.7%, a behavior surpassed only Slovakia and Poland ( both with 0.9%). The UK saw GDP grow 0.6%, but the values tend to be less favorable after the impact of the decision to leave the European Union (known by the end of June).
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