Portuguese GDP surprised on the upside rising 0.5%yoy, 1.6%yoy. The growth rate in Q3 was revised slightly upwards to 0.3%qoq. Though the demand details are not available yet, INE (Portuguese statistics) reported that the most important contribution to growth came from domestic demand, particularly consumption. Exports also accelerated. Today’s data confirms that the Portuguese recovery is underway after a prolonged double-dip recession, as Q4 was the third consecutive quarter of quarterly growth.
The carry over effect from 2013 into 2014 , i.e., the growth rate expected for 2014 should GDP remain at this level throughout the year, is 0.8%. Barring any major negative surprise, this suggests that the risks to the Government’s and IMF forecasts of 0.8% for 2014 are probably on the upside.
The first data points of 2014 from high frequency indicators suggest Q1 2014 may rise further qoq, albeit at somewhat slower pace than in Q4.