Portugal’s economy on brink of stagnation

 In Economy, Exports, News

Portugal’s economy is close to stagnation as exports are outweighed by imports

With imports out pacing exports Portugal’s economy only just managed to keep its head above water in the third quarter of 2024.

According to the National Statistics Institute (INE), Portugal’s economy only grew by 0.2% Q-on-Q while maintaining growth for three consecutive quarters (but only just) with the country’s growth oscillating between stagnation and a growth of 0.6% overall.

In the third quarter Portugal’s economy only grew by €120 million meaning that it will be difficult for Portugal’s economy to grow sufficiently at the end of the year to meet the government’s target for 2024 of 1.6%.

The Portuguese economy would need to grow 1.3% Q-on-Q at the end of the year to meet the target or €768 million on Q3.

And whilst the last quarter of the year is traditionally stronger in terms of growth, the INE shows that a Q-on-Q growth rate in Portugal of this amount is not common. The average variation Q-on-Q for GDP is 0.4% (Since the last quarter of 1994).

Nevertheless, GDP did grow more than 1.3% in the first quarters of 2203 and 2022, and in the last quarter of 2021 (1.4%), 1.7% and 1.9% respectively).

Both the government and the Council of Public Finances (CFP) suggest Portugal will round off the year with 1.9% growth for 2024 as a whole whereas the Bank of Portugal forecasts 1.6%.