Portugal’s economy contracts 14.1% in second quarter

Portugal’s economy contracted 14.1 percent in the second quarter from the first three months of this year as the eurozone country imposed lockdowns to slow the spread of coronavirus, the national statistics agency said Friday.

With gross domestic product having fallen by 3.8 percent in the first three 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 (GDP) registered a strong contraction in the second 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 percent drop in GDP for the entire year, while the central bank sees a fall of 9.5 percent.