Portuguese Economy Expanded at Faster Pace in Fourth Quarter

Portugal’s gross domestic product expanded in the three months through December at the fastest pace in a year as external demand increased.

GDP rose 0.5 percent from the third quarter, when it expanded 0.3 percent, the Lisbon-based National Statistics Institute said in a preliminary report today. Economists predicted growth of 0.3 percent in the fourth quarter, the median of nine estimates in a Bloomberg survey showed. GDP rose 0.7 percent from a year earlier, a fifth increase.

For the year of 2014, GDP rose 0.9 percent after shrinking 1.4 percent in 2012.

While Portugal emerged from recession in 2013, Prime Minister Pedro Passos Coelho still has to cut spending to meet budget targets and the government forecasts exports and investment will help drive growth this year. Portugal in May exited a three-year bailout program from the European Union and International Monetary Fund, and Coelho faces elections in September or October.

The government forecasts GDP will grow 1.5 percent in 2015, faster than an estimated expansion of 1 percent in 2014. It projects unemployment will decline to 13.4 percent in 2015.

German economic growth also accelerated at the end of last year, with GDP surging 0.7 percent in the fourth quarter after expanding 0.1 percent in the previous three months, the Federal Statistics Office in Wiesbaden said today.

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