Exports slow as GDP contracts 0.2% to 1.9%

Portugal’s economy is showing signs of cooling after GDP shrank 0.2% in the third quarter of the year to 1.9%.

The country’s Minister of Finances, Fernando Medina said that the GDP figures made it clear that because of the global recession affecting export demand “we have to reinforce internal demand”.
A preliminary estimate by the National Statistics Institute (INE), in line with projections from economists, pointed to a like-for-like growth of between 1.7% and 2.4% while the QoQ contraction forecast varied between 0.4% and 0.3%. The government had forecast growth of 2.2% for the entire year.
Nevertheless, the Finance minister, who said in April that it would have been irresponsible to cut IRS by more than €500 million, because of a €2Bn surplus was able to give some €1.3Bn back to tax payers. That surplus has now been recalculated to €7Bn to the end of the third quarter in September.
Portugal posted the fifth highest increase in taxes among the EU Member States in 2022, up from 37.4% to 38% although the Portuguese ratio is, however, below the EU average according to statistics released by the EU’s statistics department Eurostat.