Portuguese economy remains sluggish growth based on … – Público.pt

Portuguese economy remains sluggish growth based on … – Público.pt

                 

                         
                     

                         
                     

                         

                 

 
                         

The Portuguese are gradually consume more, giving a boost to the economy, but at the same time imports grow, contributing negatively to GDP. The result: the economic recovery in Portugal continues to be done at a slow pace and waiting for a bailout from European neighbors to gain speed in the future

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                         Data published by the National Statistics Institute (INE) for the Portuguese economy during the third quarter of this year were not a surprise. Economic growth over the previous quarter was 0.2%, a slight slowdown from the 0.3% that had been recorded in the second quarter. And compared to the same period last year, the economy grew in the third quarter at a rate of 1%, while in the second quarter this indicator was 0.9%.

These were the numbers of approximately, most analysts was waiting. And with this growth, the economy remains at a pace that allows still believe in achieving the end of the year a rate close to 1% growth, the value that is currently estimated by the Government after making a downward revision in proposed State budget presented in October.

In its autumn forecasts, the European Commission – which is pointing to an increase in the total for the year of 0.9% – precisely predicted third-quarter growth was 0.2%. E estimated that with an acceleration of 0.7% in the fourth quarter, 0.9% at the end of the year would be achieved.

Teresa Gil Pinheiro also think it is possible. The BPI analyst explains that the bank still forecast growth for 2014 at this time a variation of 1%, which may revise downwards slightly short. And he says that the strongest GDP growth will be needed in the fourth quarter for this scenario to materialize “is likely”, especially via “an acceleration of consumption.”

The problem for the Portuguese economy the term is however precisely there: in the way the economy seems to get only grow based on private consumption. Although the INE, the flash estimate of national accounts which was published on Thursday, still not release numbers for the various components of GDP are given clues in a statement posted on its website that reveal how the economy is , even slowly, to grow.

“Domestic demand a more intense positive contribution to the annual change in GDP in the third quarter, mainly reflecting the evolution of the final consumption expenditure of households” INE said.

In contrast, “net external demand registered a more significant negative contribution due to the acceleration of imports of goods and services, with exports of goods and services brought growth close to that observed in the the previous quarter. “

That is, the Portuguese economy maintained the same pace of growth, with a growth of 0.2% during the quarter, thanks to an acceleration in private consumption, which managed to make the contribution more negative trade relations with the country abroad. A negative economic climate in the rest of Europe, exports managed to continue to grow at a steady pace, but imports accelerated again.

For the calculation of GDP, increases in consumption, investment and exports contribute positively to the overall calculation form, but imports contribute negatively.

This kind of growth in the consumer pulls the economy but at the same time causes an increase in imports, has been a constant problem in the economy in recent decades. With the introduction of a strong policy of austerity since 2011, consumption fell and imports as well.

The hope of the troika and the Government was that the economic recovery was now made on the basis of exports and the Imports do not go up as much as consumption increased. That does not seem to be happening already.

One explanation for this result could be the fact that a major part of the increase in consumption is to be recorded because of the purchase of cars. After spending several years to avoid this size, the Portuguese began again to renew its outdated fleet and the problem is that this is the type well that the overwhelming majority, are from abroad. According to the INE, in the first nine months of this year, imports of vehicles for the transport of passengers increased 46.3%.