Portugal’s economy expanded in the second quarter for the first time since 2010 as export growth accelerated and investment rose.
Gross domestic product increased 1.1 percent from the first quarter, when it fell 0.4 percent, the Lisbon-based National Statistics Institute said on its website today. That matches a preliminary report on Aug. 14. GDP dropped 2.1 percent from a year earlier, the smallest annual contraction in almost two years.
Portugal’s economy expanded as the euro area emerged from a record-long recession, led by trading partners Germany and France, amid the first sustained period of financial-market calm since the start of the debt crisis. The jobless rate dropped to 16.4 percent in the three months through June from 17.7 percent, the first quarterly decline in two years.
Exports rose 5.2 percent in the second quarter from the previous three months, faster than 2.6 percent growth in the first quarter, today’s report showed. Investment climbed 3.3 percent and household spending rose 0.4 percent. Government spending was unchanged from the previous quarter.
Hotels in Portugal recorded an 11 percent rise in revenue in June from the same month last year, bolstered by an increase in overnight stays by British and Irish tourists. Tourism represents about a tenth of Portugal’s GDP, according to the Economy Ministry.
Prime Minister Pedro Passos Coelho is cutting spending and raising taxes to meet the terms of a 78 billion-euro ($102 billion) aid plan from the European Union and the International Monetary Fund. Portugal plans to generate savings of about 4.7 billion euros in 2013 and 2014, and Coelho said in May that government ministries will have to reduce spending on purchases of goods and services by at least 10 percent next year.
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 unemployment rate will climb to 18.2 percent in 2013 and 18.5 percent in 2014.