After a year of continuous recovery and a very strong performance in the first three months of the year, the Portuguese economy felt the effect of the war in Ukraine and, in a counter-cycle with the Eurozone, retreated in the second quarter. A negative change in GDP of 0.2%. However, the possibility of the growth rate still exceeding 6% in 2022 compared to 2021 is not ruled out.
As stated therein Quick assessment The National Statistics Institute for National Accounts (INE) published this Friday that the Portuguese GDP contracted by 0.2% in the second quarter of the year, compared to the immediately preceding three months.
This negative variation follows a 2.5% quarterly growth (Small correction Down from the 2.6% initially estimated), this was one of the best results among the countries of the euro area, and the change in GDP was 6.9% compared to the same period last year, a significant slowdown in relation to the 11.8% achieved in the first quarter of the year.
This weak performance of the Portuguese economy in the second quarter of the year was already expected by most analysts, not only because of a particularly strong result in the first quarter, but mainly because European economies began to suffer in the second quarter. By the effects of the war in Ukraine in terms of prices, confidence of economic agents and trade flows.
Even so, the numbers now known do not eliminate the possibility of registering a growth rate of more than 6% in 2022, as recently predicted by the Bank of Portugal and the European Commission. In fact, despite registering zero changes in the GDP chain in the third and fourth quarters of this year, the annual growth of the economy will be 6.2% in 2022.
In Predictions At the summer European Commission, GDP was already expected to contract by 0.2% in the second quarter, which did not prevent Brussels from pointing to 6.5% growth for the full year.
However, the final result of the year will depend on how Portugal and its European partners can react to the difficult situation they face in the second half of the year. inflammation And this Interest rate hike Pressure on consumer purchasing power and threat Interruption of Russian gas supply Clouding the outlook for some of Europe’s major economies.
The fact is that with negative growth in the second quarter, the Portuguese economy risks entering, if it returns to a negative result in the third quarter, a situation of technical recession, usually defined as at least two consecutive quarters. with negative changes in GDP in the chain.
Europe is surprised and accelerated
For now, at the European level, the response of the economy is surprising, even on the positive side. A slowdown in the Portuguese economy coincided with a slight acceleration in the Eurozone. and, After standing positive in the first quarter, the Portuguese economy was now one of the euro zone countries that delivered this Thursday. New GDP dataOne of the weakest performers in the second quarter.
According to data released by Eurostat this Friday, GDP growth in the euro zone was 0.7%, down from 0.5% in the first quarter. The year-on-year change in GDP fell to 4% from 5.4%.
These results were clearly more than expected. Among most analysts, forecasts suggest that the European economy will exhibit a negative impact in the second quarter. Conflict in Ukraine was at the level of activity. The European Commission itself, in its summer forecasts, pointed to a slowdown in eurozone GDP in the second quarter.
What appears to have happened is that three of southern Europe’s most important economies – France, Italy and Spain – recorded significant accelerations in the second quarter. In France, chain growth was 0.5% in the second from -0.2% in the first quarter; In Italy it went from 0.1% to 1%; and 0.2% to 1.1% in Spain.
This offset the fact that Germany, the eurozone’s largest economy, had stalled. If it grew by 0.8% in the first quarter, the variation in GDP compared to the immediately preceding quarter was zero, confirming fears that the country might. On the brink of recession.
Looking at the GDP data for the second quarter, it is clear that within the Eurozone economies, the divergence in performance between countries directly feeling the effects of the war in Ukraine and at least 2016 is beginning to emerge. Immediate, less affected.
However, this above-expected growth in the second quarter in the Eurozone, if combined with a A further rise in inflation rate In July, it rose to 8.9%, reinforcing expectations that the European Central Bank will continue with plans to raise interest rates by another 0.5 percentage points at its scheduled meeting in September. It happened in the meeting From last week.
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