GDP stabilised in Eurozone and grew in Portugal: Week in Review & Week Ahead


Portuguese GDP was up 0.6%qoq (0.8%yoy) in Q2 after -0.6%qoq (1.3%yoy) in Q1, better than expected. The details are not available yet (8 September) but the statistics office reported that the major contribution to growth came from exports. Today’s news are positive as they show that the economy returned to growth, after a disappointing Q1. However, part of this rise is due to the effect of Easter, which was in April this year and in March last year. Given that Portuguese GDP is seasonally adjusted but not adjusted for working days, the date of Easter can have a significant impact on the accounts. Given recent data we believe that Portuguese GDP is running at about or just below 1% annualised, a tad below the Government’s projections in the 2014 Budget.

In the Euro area GDP stabilised but German GDP was down 0.2%qoq, spooking the markets.


The Portuguese CPI for July fell 0.9%yoy, minus 0.5 p.p than the previous month and negative for the sixth month in a row. Deflation is now materialized in the country, whilst inflation remains very low in Europe: in July Euro area annual inflation was 0.4% after 0.5% in June.

This week, a study on the Portuguese population held by the National Statistics Office says the country lost half a million people with ages in between 15 and 29 years old in the decade 2001-2011. Though the diminishing fertility is the primary reason reported, emigration is also an important factor since half of the Portuguese emigration happens with citizens of 15-29 years old.


WEEK AHEAD 18th – 22nd August

The week ahead is short on economic data.

  • 21st August (Bank of Portugal): the complete version of the Statistical Bulletin will be available.
  • 21st August (Markit): The Eurozone flash PMI may provide a first glance on the direction of Q3 GDP, after the Eurozone economy have failed to grow in Q2.