global economy

Portugal’s economy contracts 14.1% in 2nd quarter

Agence France-Presse, Agence France-Presse
Portugal’s economy contracts 14.1% in 2nd quarter

People sit at a terrace bar in Cascais in the outskirts of Lisbon on May 28, 2020. - Cascais city council proposes free tests to its 214,000 inhabitants to detect the novel coronavirus. (Photo by PATRICIA DE MELO MOREIRA / AFP)

Portugal now meets the technical definition for a recession, with two straight quarters of contraction in gross domestic product

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