Portuguese Economy Shrinks Less Than Expected in Q1

Portugal's gross domestic product shrank a smaller-than-expected 0.3 percent in the first quarter after contracting 1.8 percent in the previous quarter. Year-on-year, the economy contracted 3.9 percent. The economy shrank for a 10th quarter in the three months through March as the government cut spending and the Euro Area recession deepened.

The Portuguese gross domestic product, registered a year-on-year change rate of -3.9 percent, a slightly deeper decline than the previous quarter's 3.8 percent. Domestic demand presented a more negative contribution for the year-on-year change rate of GDP, determined by the more pronounced decline in Investment, particularly in Construction. 
In the opposite direction, the positive contribution of net external demand increased, mainly due to the more intense reduction of Imports of Goods and Services. 
In March, the government announced less ambitious targets for narrowing its budget deficit as it forecast the economy will shrink 2.3 percent in 2013, twice as much as previously estimated.

INE | Nuno Fontes | nuno@tradingeconomics.com
5/29/2013 1:03:34 PM