Portugal’s GDP falls 0.5% in 1Q QoQ

Economic growth in Portugal slowed to 1.6% in the first quarter compared to the same period in 2024 according to statistics published by the country’s National Statistics Institute (INE) published on Friday.

However, GDP fell by 0.5% in 1Q compared to the last quarter of 2024.

Economists had already expected a strong slowdown in the growth of the economy, but none of the forecasts pointed to a retraction in growth to 0.5%.

According to economists consulted by the news source ECO, GDP growth was expected to stand at between 2.4% and 2.8% in like-for-like terms and 0.1% and 0.6% QoQ.

Preliminary data from the INE shows that compared to the fourth quarter of 2024, GDP fell to 0.5% after a growth of 1.4% in 4Q, 2024. This was the result of a combination of a zero increase in internal demand (after having been positive in the last three months of 2024) and a negative contribution in terms of net overseas demand.

The Bank of Portugal, for example, predicted that the QoQ rate of variation on GDP would be 0.2% in the initial quarter of 2025. “In the first quarter of 2025, nominal disposable income is likely to have decreased by 1.2% — partially reversing the increase of the fourth quarter — and be reflected in a retraction of private consumption already corroborated by available economic indicators,” states the institution led by Mário Centeno in the ‘March Economic Bulletin’.

This performance, compared to the last quarter of 2024, compares with the growth of 0.4% in the Euro Zone and 0.3% in the European Union, according to data released by Eurostat on Wednesday. When compared to the first three months of 2024, the growth rate in the single currency countries was 1.2% and 1.4% in the EU as a whole.

In a QoQ comparison, the expected slowdown occurred but had been sharper than expected by economists.

The economy grew 1.6% in 1Q after a 2.8% in the last quarter of 2024, partly because of a slowdown in private consumption and a negative contribution from net overseas demand meaning a slowdown in the export of goods and services.