Portugal’s economy stabilises: preliminary data

Portugal, which is implementing an austerity programme under its EU-IMF bailout, saw its economy stabilise in the second quarter, according to a preliminary estimate released on Tuesday.

While Portugal’s economy was stable compared to the first three months of the year, it contracted by 0.9 percent from the second quarter of 2010, the national statistics institute INE reported.

Portugal entered recession with a 0.6 percent drop in gross domestic product (GDP) in the final quarter of last year, followed by another 0.6 percent drop in the first three months of this year.

The country’s new centre-right government forecasts a 2.3 percent contraction this year followed by growth in 2013.

Portugal received a 78-billion-euro ($110 billion) from the European Union and International Monetary Fund earlier this year and agreed in return to stringent budget measures to scale back state spending.

It aims to cut the public deficit to 5.9 percent of the country’s GDP this year from 9.1 percent last year.