LISBON (Reuters) – Portugal’s gross domestic product fell by 14.1% in the last quarter of 2020, the biggest contraction involving the coronavirus affected key sectors of the economy.
In a quick estimate, the National Statistical Institute (INE) said that between April and June this year, the country’s GDP plummeted 16.5% at the same time in 2019, affected by the collapse of personal consumption, investment and exports.
“This is a figure that will be remembered in the history of the Portuguese economy, as a result of containment, especially between mid-March and the end of April, which affected almost all economic sectors,” said Filipe García, Informacao’s economist. Consulting Markets Financeiros.
Portugal’s two main trading partners, Spain and Germany, also recorded contractions of GDP in the last quarter of the year, from 18.5% and 10.1%, respectively.
In a sign of weak domestic demand, the INE said customer inflation fell 1.3% in July after 0.9% emerged in June.
The country had experienced some of its most powerful expansion streaks in recent years after emerging from the economic crisis and the 2010-13 debt crisis.
Last year, Portugal’s GDP grew by 2.2%, while unemployment by 6.5%, near record levels. But the economy depends on tourism, which accounts for up to 15% of GDP and has suffered coronavirus blockades in Portugal and abroad.
The coronavirus is expected to leave lasting scars on the country’s economy, and the Bank of Portugal predicts that Portugal’s GDP will contract by 9.5% until 2020, the biggest recession in a century. Estimates will fall by 6.9%.
The pandemic also threatens Portugal’s unemployment rate, which rose to 7% in June from the revised 5.9% in May, while tens of thousands of jobs were destroyed by the coronavirus.
But the total number is likely to be particularly higher. Many employees stopped looking for paint confinement, which meant they were excluded from unemployment statistics.
The southern Algarve region, which is full of visitors but is now almost deserted, has been greatly affected, with the number of unemployed registered in June from 231% to more than 26,000.
Portugal, which reported a total of 50868 cases of coronavirus and 1,727 deaths, began lifting its blockade on May 4, but outbreaks in and around the capital Lisbon have worried national and foreign authorities.
Reporting through Sergio Goncalves and Catarina Demonydit; edited through Alison Williams, Larry King
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