Portuguese economy shrinks 0.6% in third quarter: official

9th December 2011, Comments 0 comments

The Portuguese economy shrank by 0.6 percent, more than first estimated, in the third quarter and by 1.7 percent over 12 months, final official data showed on Friday but exports remained strong.

Portugal is the subject of a debt rescue by the European Union and International Monetary Fund and has introduced widespread radical measures to correct its public finances.

The government has forecast that the economy will contract by 1.6 percent this year and then by 3.0 percent next year.

The Ine statistics office which published the final data for the third quarter had initially estimated that the economy contracted by 0.4 percent in the quarter and also by 1.7 percent over 12 months.

The economy, which contracted by 0.2 percent in the second quarter, has been shrinking since the last quarter of 2010.

Ine said that the 12-month contraction "is due to a strong fall of internal demand" which shrank by 4.6 percent from July to September after contraction of 5.1 percent in the second quarter.

Investment fell by 13.7 percent and household consumption by 3.3 percent, owing mainly to a fall of 16.5 percent in purchases of durable goods.

Exports of goods and services, despite continued strong growth, showed a slowdown. Growth was 6.5 percent over 12 months from 8.7 percent in the previous quarter.

© 2011 AFP

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