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Portugal’s trade deficit narrows further in July

The trade deficit in crisis-hit Portugal shrank to 567 million euros ($725 million) in July, a drop by nearly half from a year before, but growth in exports slowed, official data showed Monday.

Exports rose by 6.8 percent from July 2011 to 4.0 billion euros, while imports declined 6.2 percent to 4.6 billion euros, the national statistics office said Monday.

But the previous month, exports rose by 9.2 percent on an annual comparison, while imports had declined by 2.4 percent.

On a month-on-month comparison, exports climbed by 2.4 percent in July will imports rose by 3.5 percent.

The INE national statistics office said the rise in exports was driven by trade outside of the EU, while imports declined due to a sharp economic slowdown.

The government, struggling to stabilise strained public finances with the help of a 78-billion-euro EU-IMF debt bailout, is counting on exports to get the economy growing again as stiff austerity measures dampen demand.

With the economy contracting by 3.3 percent in the second quarter, exports are the only motor of growth.