USA :Portuguese GDP fell a historic 16.5% in the second quarter

Lisbon, Jul 31 (EFE) .- Portugal’s GDP fell by 16.5% in the second quarter in equivalent terms, an unprecedented drop in the historical series caused by the pandemic, which especially affected private consumption and investment.

The data has been advanced this Friday by the National Statistics Institute (INE) in a “quick estimate”, before publishing its final results in mid-August.

The Institute is ahead with the idea, explains, to have information as quickly as possible to analyze the impact of the coronavirus on GDP, which compared to the first quarter fell by 14.1%.

The decline is explained “to a large extent” by the negative contribution of domestic demand, especially with a sharp decline in private consumption and also in the section on investments and exports, on which he will provide more details once he publishes his report on 14 August.

After knowing the data, the Portuguese economy minister, Pedro Siza Vieira, told journalists that it will be necessary to “reflect” on the official projections of the government, which currently point to a 6.9% drop in GDP at the end of this year.

The minister downplayed the fact of revising the figure, which according to forecasts by the Bank of Portugal will actually be 9.5%, and stressed that given the “magnitude of the fall in income, all public support” launched may not be sufficient to respond to the needs of all companies.

“We are not unaware that it is possible, that it is probable that some companies will not be able to hold on and that with this there will be a growth in insolvencies and there will be a growth in unemployment,” he said.

Portugal expected a historical contraction of GDP in the second quarter, the first one completely affected by the coronavirus, which forced the state of emergency to be decreed in mid-March.

Between January and March, the country registered a drop of 2.3% in homologous terms, which is why it has already added two consecutive quarters with negative results.

A fact that makes specialists think that the collapse of the GDP at the end of the year will be greater than that foreseen by the government of the socialist António Costa.

At the moment, Banco de Portugal estimates that the drop will be 9.5%, in line with Moody’s, which it considers to be 9.2% at the end of this year.

(c) EFE Agency