By Chris Graeme [email protected]
Portugal’s economy is now in recession as the one positive aspect over the last two years, rising exports, plummet.
With public consumption and investment in freefall, Portugal was backing exports in a bid to keep its economy out of an official recession.
But the latest quarterly figures from the Portuguese Statistics Institute (INE) are not encouraging.
In 2009, the country’s GDP was at -2.3%. By the start of 2010 exports had pushed that up to a modest +0.9% growth.
However, from the last quarter of 2010 it has been all downhill with the GDP going to -0.4, -0.6, -0.2 and -0.6% respectively.
The latest numbers released on Friday last week by the INE are just as pessimistic. They show that Portugal’s GDP has fallen more than expected for the third quarter of 2011 when compared with the third quarter of 2010.
This negative variation is explained by a fall in internal demand and a slowdown in exports.
GDP fell by 1.7% against the 1% on the previous quarter. In mid-November, the INE estimated a fall in GDP of around 0.4% for the third quarter between July and September.
Now that value has been reviewed to -0.6%, making the recession over the last three quarters confirmed.
Portugal has only suffered a recession like this once in the past three decades: between April 2008 and March 2009, following the world economic and financial crisis.
That record is likely to be beaten by next year if the quarterly figures continue in negative growth territory next year.
As a symptom of the crisis, economic relations between the two countries most affected by the recession in the European Union – Greece and Portugal – have been reduced to a trickle.
For the first time in 18 years, the value of imports of goods from Greece to Portugal was higher than Portuguese exports to that country.
Greece ended the third quarter with a recession of 5%. Despite this, exports to Greece from Portugal increased to September by 0.6% on the previous year.
But this wasn’t enough to free Portugal from a trade imbalance with Greece which now stands at €20.1 million.