March 11, 2014 / 11:19 AM / 5 years ago

Portugal economy rebounds in fourth quarter on consumers, exports

LISBON (Reuters) - Portugal’s bailed-out economy grew a revised 0.6 percent in the last three months of 2013, accelerating from the previous quarter’s 0.3 percent expansion as consumer demand rebounded and exports rose, data showed on Tuesday.

Workers unload containers using a forklift at a port in Lisbon September 6, 2013. REUTERS/Rafael Marchante

The figures show Portugal’s economy is on a stronger footing as it prepares to exit its international bailout in May after leaving behind its worst recession since the 1970s.

Data released by the National Statistics Institute also showed the economy grew in the final quarter versus a year earlier although for all of 2013 gross domestic product still shrank 1.4 percent compared with a slump of 3.2 percent in 2012.

“These are positive data and meet expectations - the main contribution is from a stabilization in domestic demand and net foreign demand remains positive,” said Paula Carvalho, chief economist at Banco BPI.

In the fourth quarter, GDP rose 1.7 percent compared with the same period a year earlier, after contracting 0.9 percent in July-September from the same quarter in 2013, the second reading of GDP data showed. In the first INE reading, GDP rose 0.5 percent on the quarter and 1.6 percent year-on-year.

The institute said domestic demand rose 0.1 percent in the fourth quarter from a year earlier, the first increase in many years, as confidence began to return after Portugal’s debt crisis which forced it to seek a bailout in 2011. Consumer demand rose 0.6 percent from a year earlier.

Exports, which have been the only positive element of the economy since the crisis started, jumped 9.4 percent in the fourth quarter from a year ago, accelerating their pace of gains from earlier in 2013.

Investment also helped GDP in the fourth quarter as its prolonged slump eased. Investment fell 1.8 percent in the fourth quarter from a year earlier compared with a decline of 4.4 percent in the preceding three months.

For all of 2013, domestic demand fell 2.6 percent and exports rose 6.1 percent.

The full-year GDP data beat the government’s forecast of a 1.8 percent contraction in 2013. The economy is expected to return to growth this year with a 1.2 percent expansion forecast.

Lisbon expects to exit its EU/IMF bailout programme in May 2014.

Reporting by Axel Bugge; Additional reporting by Sergio Goncalves and Patricia Rua; Editing by Catherine Evans

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