The Portuguese economy has outperformed every single economy in the European Union by registering growth of 1.1 percent in its Gross Domestic Product during the second quarter of 2013, putting an end to a recession which started at the end of 2010.
Portugal is, at least currently, the best example of how to achieve economic growth in a global crisis and has put an emphatic end to ten consecutive quarters of negative growth.
A boost of 1.1 percent far exceeded the most optimistic forecasts issued in the run up to the release of these eagerly anticipated figures, with the most hopeful pointing to growth of around half a percent.
GDP in the embattled eurozone, aided by growth in Germany, France and Portugal, rose by 0.3 percent, but was still being held back by Spain, Italy and Cyprus, whose economies all shrank once more during the second quarter. Greece and Ireland have to date failed to provide figures to Eurostat, though expectations point to continued recession for these bailed-out countries.
Statistics Portugal, in revealing the country’s encouraging quarterly national accounts, said growth was mainly driven by the less pronounced decrease in investment, particularly in the building industry coupled with the significant acceleration in the export of goods and services.
It added that Easter 2013, falling in April (it was celebrated in March in 2012), also had a positive influence on quarterly figures.
Other major economies also reported growth, but none as significant as in Portugal.
Germany’s economy, which had stagnated the previous quarter, rose by 0.7 percent, while France ended its flirtation with recession by growing 0.5 percent during the second quarter of this year.
The United Kingdom witnessed its GDP expand by 0.6 percent, while the United States saw its economy rise by 0.4 percent over the period in question.
Nonetheless, and while the national economy reported substantial quarterly growth, Portugal is still recovering lost ground.
The GDP was down two percent versus the second quarter of 2012, though the drop was less pronounced than in previous quarters, especially the first three months of 2013, when the year-on-year change rate was a negative 4.1 percent.
News that Portugal’s economy might have turned the corner, follows figures published late last week by Statistics Portugal indicating unemployment had shrunk strongly between April and June, dropping from a record high of 17.7 percent to 16.4 percent.
While no official reasons have been provided for the drop, it is believed a 3.6 percent fall in the number of jobless in the Algarve was the major contributing factor.
This feature has raised concerns that the drop was partially artificial and that another rise in unemployment can be expected in the fourth quarter of 2013 as workers in this popular holiday destination are forced to re-join dole queues.
Overall, growth in major EU economies, which remains tentative, is seen as the biggest driving force behind the national economy and continued growth elsewhere in Europe is expected to be mirrored in Portugal in the short-term.
Mario Draghi, President of the European Central Bank, said at the beginning of August that evidence at his disposal points to gradual recovery in economic activity in the remaining part of the year and in 2014.
by Brendan de Beer…