Portugal’s economy expanded in the second quarter for the first time since 2010 as export growth accelerated.
Gross domestic product rose 1.1 percent from the first quarter, when it fell 0.4 percent, the Lisbon-based National Statistics Institute said in a preliminary report today. That follows ten consecutive quarters of contraction. Economists predicted an increase of 0.1 percent, according to the median of 10 estimates in a Bloomberg News survey. GDP dropped 2 percent from a year earlier, after declining a revised 4.1 percent the previous quarter.
The lower annual rate of contraction reflects a slowdown in the reduction of investment and a sharp acceleration in exports, the statistics institute said. Portugal’s trade deficit narrowed in the three months through June as exports rose more than imports.
Portugal’s economy returned to growth as the euro area emerged from a record-long recession, led by Germany and France, amid the first sustained period of financial-market calm since the start of the debt crisis. The economy of the 17-nation euro region expanded 0.3 percent in the second quarter after six quarters of contraction.
Banco Comercial Portugues SA, Portugal’s biggest non-state-owned bank by assets, said on July 29 that loans to companies are starting to pick up. “We feel Portuguese companies are having an exemplary conduct and you can see the clear replacement of imports and focus on exports,” Chief Executive Officer Nuno Amado said.
Portuguese power demand rose 3.3 percent in July, according energy grid REN-Redes Energeticas Nacionais SA. “With energy-consumption data, we still cannot conclude that the economy is recovering, but we can at least conclude that the deterioration of the situation has almost been stopped,” REN Chief Executive Officer Rui Cartaxo said on Aug. 1.
The nation’s jobless rate dropped to 16.4 percent in the three months through June from 17.7 percent, the first quarterly decline in two years.
Prime Minister Pedro Passos Coelho has been battling high joblessness as he cuts spending and raises taxes to meet the terms of a 78 billion-euro ($103 billion) aid plan from the European Union and the International Monetary Fund. Coelho announced measures on May 3 intended to generate savings of about 4.8 billion euros through 2015 that include reducing the number of state workers.
Economic growth has averaged less than 1 percent a year for the past decade, placing Portugal among Europe’s weakest performers. The government projects GDP will contract 2.3 percent this year before growing 0.6 percent next year. The jobless rate will climb to 18.2 percent in 2013 and 18.5 percent in 2014.