(Reuters) – The pace of Portugal’s economic growth doubled to 11.9% in the first quarter from a year earlier and accelerated from the previous quarter, in contrast to a slowdown in Europe, thanks to robust private consumption and the rebound in tourism.
In its second reading of quarterly gross domestic product, the National Institute of Statistics on Tuesday confirmed its flash estimates published a month ago, including the quarter-on-quarter expansion of 2.6%, against 1.7% in the fourth quarter of 2021.
“The figures are very good, Portugal is leading the eurozone in terms of growth, which is driven by private consumption and a solid recovery in tourism activity, which should continue to support growth this summer,” he said. said Paulo Rosa, senior economist at Banco Carregosa.
Still, he warned that “if high inflation persists, it will be a huge risk, and economic growth should start to slow after the summer, not least because the European Central Bank is expected to start raising interest rates soon, which should reduce the available budget income”.
The INE said separately that consumer prices rose 8% year on year in May, at their fastest pace since February 1993, fueled by soaring energy and commodity prices after the Russian invasion of Ukraine.
Citing the inflationary impact of the conflict in Ukraine, the Portuguese government last month slashed its economic growth outlook for this year to 4.9%, in line with last year’s rebound from the 2020 pandemic-induced recession.
The INE said private consumption rose 2.2% between January and March from the previous three months and jumped 12.6% from a year ago, while investment rose. 3.3% and 5.8%, respectively.
Exports were up 1.7% from the previous quarter and 18.3% from a year ago, driven by services such as tourism which is showing a strong recovery after being hit hard by restrictions related to COVID-19.