Portugal avoids recession with second-quarter growth

Portugal, which exited a multi-billion euro bailout scheme in May, returned to growth in the second quarter, avoiding recession in spite of a banking crisis.

Portugal’s gross domestic product grew by 0.3 percent in between April and July, the National Institute of Statistics (INE) said on Monday.

The rebound “is mainly down to the progression of exports of goods and services,” the INE said in a statement.

The institute reduced its initial estimate of 0.6 percent growth in the second quarter.

Portugal’s economy shrank 0.5 percent in the first three months of 2014, slightly better than the 0.6 percent contraction the INE had reported initially.

Year on year, Portuguese GDP grew 0.9 percent in the second quarter following a 1.0-percent increase in the first three months of 2014 compared to the previous year.

Portugal narrowly avoided dipping back into recession — defined by two consecutive quarters of negative economic growth — after a prolonged period of contraction sparked by 2008’s financial crisis.

The government narrowly averted a national disaster in August by bailing out the stricken Banco Espirito Santo, one of Portugal’s largest lenders, with help from the financial sector.

Portugal was one of the eurozone countries which got into severe difficulties at the height of the eurozone debt crisis but which are now showing signs of recovery at the price of deep structural reforms and budget discipline.