LISBON: Portugal’s economy powered ahead last year, growing at its fastest pace since 2000 less than four years after exiting a bailout as a jump in exports helped it pick up steam in the final quarter.
Full-year growth hit 2.7 percent, beating the government’s forecast by a tenth of a point, while the quarterly expansion rose to 0.7 percent from 0.5 percent in the preceding three months, Wednesday’s National Statistics Institute (INE) data showed. This evolution resulted from an increased contribution of internal demand, reflecting mainly an acceleration of investment, while net external demand had the same contribution as in 2016,” the INE said. Growth in exports was the biggest driver in the final quarter, when year-on-year growth edged down to 2.4 percent from 2.5 percent in the third quarter. There was a lower positive contribution from internal demand and investment.
Growth in the nation that exited its international bailout in 2014 was 1.5 percent in 2016 and, following a strong base effect last year, the Socialist government expects an expansion of 2.2 percent this year.
The now-entrenched recovery has allowed Portugal to sharply reduce its budget deficit and exit the European Union’s excessive deficit procedure last year. The government expects to have cut the fiscal gap to around 1.2 percent of GDP last year – the lowest since the country’s return to democracy in 1974.
