Portuguese GDP fell 3.4% yoy and 0.8% qoq in 2012 Q3. The fall was likely to be driven by a decline in domestic demand, although less marked than in the previous quarter, while net exports’ positive contribution should also be lower. The unemployment rate reached 15.8% in 2012 Q3, 3.4 percentage points higher than last year.
GDP Q3 2012 flash estimate
According to today’s flash estimate, Portuguese GDP fell –3.4% yoy, after -3.2% yoy in Q2. GDP declined 0.8% qoq. These results are in line with Macrometria’s forecasts for Q3.
According to Portuguese Statistical Office (INE), this quarter’s decline is driven by a contraction in domestic demand, albeit less severe than in the second quarter. However, the decline in domestic demand is likely to intensify in the fourth quarter. The recent decline in consumer confidence, as well as the cut in Christmas pay should weigh on consumption. As for investment, the most recent Bank Lending Survey points to a further tightening in credit conditions by banks .
Turning to net trade, INE reported that its contribution to growth remained positive in Q3, but less so than in Q2. The data available so far shows that, in the third quarter, goods’ exports were down 0.9% qoq and imports were down 4.7% qoq. The outlook for net exports remains cloudy as the major Portuguese trading partners are likely to slow down or enter recession in coming months.
Meanwhile, the Bank of Portugal revised downward its projections: the Bank expects GDP to decline 1.6% in 2013, against 1% of the Ministry of Finance. The main difference between this forecast and recent ones by the Portuguese Government, the IMF and the EU Commission is the pessimism towards investment.
15.8% of unemployment
The unemployment rate rose to 15.8% in Q3 after 15% in Q2. This rate is 3.4 percentage points higher than the that of Q3 2011 (12.4%). The number of unemployed was up more than 25%yoy in Q3. For 2013, the Portuguese Government expects the unemployment rate to average 16.4%.