13 Sep 2012

Portugal's 2012 second quarter economic data

These are a few figures obtained from the second quarter national accounts data published by the National Statistics Office. Portugal is undertaking an adjustment program sponsored by the IMF, the ECB and the European Commission. The main goal of of the program is to bring public finances to a sustainable path. This goal is not being met and so far the only success has been in reducing foreign indebtness. That is the main conclusion we can read in the data. 

The adjustment has led to a huge compression of domestic demand  

Construction is, without surprise, the sector taking the most beating. This is partially a result of its oversize and its sensitiveness to domestic demand (the data is added value)

The balance of trade has improved remarkedly although I fail to see (as Abebe Selassie does in today's interview to Publico) that the correction is being made essentially by the good perfomance of exports and not by the compression of imports.

 Finally, the good news. The huge adjustment in financing needs.

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