Portuguese Investment Helps Economy to Expand at Faster Pace

Portugal’s economy grew faster than initially estimated in the fourth quarter as investment continued to expand.

Gross domestic product climbed 0.6 percent from the third quarter, when it rose 0.3 percent, the Lisbon-based National Statistics Institute said on its website today. The institute had said in a preliminary report on Feb. 14 that output grew 0.5 percent. From a year earlier, GDP increased 1.7 percent in the three months through December, the first expansion in three years. The economy contracted 1.4 percent in 2013 after shrinking 3.2 percent in 2012.

Portugal emerged from its longest recession in at least 25 years in the second quarter of last year, supporting Prime Minister Pedro Passos Coelho’s attempts to regain full access to debt markets once the country’s 78 billion-euro ($108 billion) bailout program ends in May. Coelho still has to trim spending by 3.2 billion euros in 2014 to meet targets in the European Union-led aid plan after relying mostly on tax increases in 2013.

Investment climbed 3.3 percent in the fourth quarter from the previous three months and government spending rose 1.2 percent, while private consumption fell 0.5 percent, today’s report shows. Exports increased 1 percent and imports advanced 0.5 percent.

EDP-Energias de Portugal SA, the country’s biggest utility, said on Feb. 27 that its investment in Portugal increased 3 percent to 937 million euros in 2013 as it builds five new hydropower plants and spends on its electricity and natural gas distribution networks.

The government raised its growth forecast for this year to 1.2 percent last month from 0.8 percent. Portugal’s jobless rate fell to 15.3 percent in the fourth quarter, the third consecutive decline.

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