Portugal GDP Growth Eases On Lower Domestic Demand; Inflation Slows Further

(RTTNews) - Portugal's economic growth moderated for the third straight quarter in the three months ended December amid a deceleration in the growth of domestic demand due to a decrease in private consumption and investment, flash data from Statistics Portugal showed on Tuesday.

Separate official data revealed that consumer price inflation eased for the third consecutive month in January amid a continued slowdown in the energy prices.

Gross domestic product, or GDP, advanced 3.1 percent year-on-year in the December quarter, slower than the September quarter's increase of 4.9 percent.

Further, this was the weakest rate of expansion since the current sequence of growth began in the second quarter of 2021.

Private consumption and investment both decelerated, contributing to a decline in domestic demand during the fourth quarter, the agency said.

The positive contribution of net external demand also decreased, with exports of goods and services in volume decelerating more intensely than imports.

On a quarterly basis, GDP advanced 0.2 percent in the fourth quarter versus a 0.4 increase in the preceding quarter.

Read more: Eurozone Economy Avoids Contraction In Q4

Another report from the statistical office showed that industrial production recovered 2.5 percent year-over-year in December, reversing a 0.2 percent fall in November. Moreover, this was the first growth in three months.

The monthly growth in industrial output accelerated to 4.1 percent in December from 3.8 percent in the prior month.

During the year 2022, industrial production rose 0.4 percent versus 4.1 percent growth in 2021.

Separate official data revealed that consumer price inflation moderated further to 8.3 percent in January from 9.6 percent in the previous month.

Energy inflation slowed markedly to 6.8 percent in January from 20.8 percent in the previous month, driven by a fall in electricity prices. On the other hand, prices of unprocessed food products grew at a faster rate.

Read more: Portugal Consumer Confidence At 5-Month High, Retail Sales Fall 1.8%

On a monthly basis, consumer prices fell at a faster rate of 0.9 percent in January, following a 0.3 percent drop in December.

EU harmonised inflation, measured by the HICP, also slowed to 8.6 percent in December from 9.8 percent in the preceding month, flash data showed.