Portugal’s economy shrank for a fourth quarter in the three months through September as the government tries to cut spending and raises taxes to narrow its budget deficit.
Gross domestic product dropped 0.4 percent from the second quarter, when it fell a revised 0.1 percent, the Lisbon-based National Statistics Institute said in a preliminary report today. Economists expected a decline of 0.7 percent, the median of six estimates in a Bloomberg survey showed. GDP dropped 1.7 percent from a year earlier.
“The more intense reduction of GDP in annual terms in the third quarter resulted mostly from the deceleration in exports of goods and services and the more expressive reduction in investment,” the institute said in an e-mailed statement.
Prime Minister Pedro Passos Coelho is cutting spending and raising taxes to meet the terms of a 78 billion-euro ($107 billion) aid plan from the European Union and the International Monetary Fund. As the country’s borrowing costs surged, Portugal followed Greece and Ireland in April in seeking a bailout.
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