Weekend Economists Kickoff the Season, September 6-8, 2013

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61. Strong export growth helps Portugal emerge from a long recession

http://elpais.com/elpais/2013/09/06/inenglish/1378480471_774940.html

Portugal pulled out of recession for the first time in over two years in the second quarter on the back of a surge in exports and an improvement in domestic demand.

According to figures released Friday by the National Statistics Institute (INE), GDP in the period April-June jumped a surprising 1.1 percent from the previous three months, the biggest increase in the euro zone, which also emerged from recession at the same time. On a quarterly basis, output in the first quarter had contracted 0.4 percent. The figures confirm a flash estimate released by the INE on August 14.

On an annual basis, growth remained negative in the latest quarter but to a lesser extent than at the start of the year as the decline in GDP eased to 2.1 percent from 4.1 percent. The negative contribution of domestic demand slowed to 2.6 percentage points from 6.1 points in the first quarter, mainly due to a less pronounced contraction in investment of 2.3 percent, compared with 15.9 percent the previous quarter. The fall in household spending eased to 2.6 percent from 4.0 percent, while the extent of the fall in outlays by the government narrowed to 2.8 percent from 3.7 percent.

The positive contribution of net external demand – exports minus imports – slowed to 0.4 percentage points from 1.9 in the first quarter as imports increased 6.3 percent after declining 4.2 percent. Growth in exports accelerated sharply to 7.3 percent from 0.7 percent as a result of higher shipments of goods and services to the European Union, which accounts for about 80 percent of Portugal’s exports, as well as to Angola, Brazil, Algeria, Morocco and China, among others.