Portugal’s economy contracts 14.1% in 2nd quarter

Portugal’s economy contracted 14.1% in the 2nd quarter from the first 3 months of this year as the eurozone country imposed lockdowns to slow the spread of the coronavirus, the national statistics agency said on Friday, July 31.

With gross domestic product (GDP) having fallen by 3.8% in the first 3 months of this year, Portugal has now met the technical definition for a recession of two consecutive quarters of a drop in quarter-on-quarter GDP.

“Reflecting the economic impact of the pandemic, the Portuguese gross domestic product registered a strong contraction in the 2nd quarter of 2020,” Statistics Portugal said in a statement.

It said domestic demand, both in private consumption and investment, were the main drivers of the drop in GDP.

Portugal is also heavily dependent upon tourism, and Statistics Portugal pointed out that “non-residents tourism [was] almost…interrupted” by the restrictions on international travel and lockdowns.

Portugal’s government expects a 6.9% drop in GDP for the entire year, while the central bank sees a fall of 9.5%. – Rappler.com